To the Members of KMF Builders and Developers Limited
Your Directors with great pleasure present the 25th Annual Report together with theaudited statement of accounts for the financial year ended 31st March 2020
1. FINANCIAL RESULTS
|PARTICULARS ||(Fig in Rs.) 2019-20 ||(Fig in Rs.) 2018-19 |
|Income ||17565817 ||40083082 |
|Expenses ||15442702 ||36243918 |
|Profit (before tax) ||2123115 ||3839164 |
|Tax Expense ||662966 ||875963 |
|Profit /(Loss ) for the period ||1460149 ||2963201 |
|Other Comprehensive income ||0 ||(101811) |
|Total Period for the year ||1460149 ||2861390 |
2. FUTURE PROSPECTS AND OUTLOOK OF THE COMPANY:
The Company witnessed an uptick in residential real estate demand compared to the yearbefore. However the outbreak of Covid-19 pandemic is expected to adversely impact thesector performance in the first half of FY21. The most significant impact of Covid-19 isexpected to be the reverse migration of workers which will impact construction activitiesacross the country.
This is expected to cause project execution delays and working capital issues for us.While the start of FY21 may be muted due to the lockdown and its subsequent toll oneconomic activity we believe customers would eventually return to the market in thesecond half of the financial year to partially mitigate the demand impact in earlierquarters. While we do expect the demand to catch up within the year we believe thecustomers would expect relaxed payment plans. We also expect some increase in customeroutstanding owing to the pessimistic liquidity environment.
While the industry at large may be adversely impacted by this pandemic and the recoveryphase slowdown Your Company has been working on making the supply chain more efficient aslockdown restrictions are eased. These measures will not only help the Company in tidingover the impact of Covid-19 but also make it more efficient in the long term. We believethat government reforms will lead to improved governance in the sector increasetransparency and bring about consolidation amongst real estate players. Our runningproject is "Purab Manor" at Bangalore. Yours Directors are quite hopeful for thesuccess of the project as well and will earn excellent earning out of it
Your Directors do not recommend any dividend for the Financial Year 2019-2020.
4. TRANSFER TO RESERVES
The Company has not transferred any amount to the Reserves for the Financial Year2019-2020.
5. TRANSFER OF UNPAID AND UNCLAIMED AMOUNT TO IEPF
Pursuant to the provisions of Section 124(5) of the Companies Act 2013 dividend andRefund of Share application Money due for refund which remains unpaid or unclaimed for aperiod of seven years from the date of its transfer to unpaid dividend/ unclaimed accountis required to be transferred by the Company to Investor Education and Protection Fund(IEPF) established by the Central Government and there provisions of Section 125 of theCompanies Act 2013. During the year no amount was due for transfer to IEPF.
6. DEPOSITORY SYSTEM
Your Company's equity shares are available for dematerialisation through NationalSecurities Depository Limited and Central Depository Services (India) Limited. As on March31 2020 87.35% of the equity shares of the Company were held in dematerialised form.
7. CHANGES IN THE NATURE OF BUSINESS
There has been no change in the nature of the business of the Company during theFinancial Year 2019-2020
8. MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments that occurred subsequent to the end ofthe financial year till the date of this report which affects the financial position ofthe Company.
9. CHANGE IN SHARE CAPITAL
There is no change in share capital structure of the Company during the financial Year2019-2020.
10. HUMAN RESOURCES DEVELOPMENT
The Company has continuously adopted structures that help attract best external talentand promote internal talent to higher roles and responsibilities. KMF's people centricfocus providing an open work environment fostering continuous improvement and developmenthelped several employees realize their career aspirations during the year.
Company's Health and Safety Policy commits to provide a healthy and safe workenvironment to all employees. The Company's progressive workforce policies and benefitsvarious employee engagement and welfare initiatives have addressed stress managementpromoted work life balance.
11. SUBSIDIARY COMPANIES
The Company does not have any Subsidiary Company.
12. CORPORATE GOVERNANCE REPORT
The Company is committed to maintaining the highest standards of Corporate Governanceand adhering to the corporate governance requirements as set out by Securities andExchange Board of India. The report on Corporate Governance for the financial year endedMarch 31 2020 as per regulation 34(3) read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forms a part of this AnnualReport. The requisite Certificate from the Statutory Auditors of the Company confirmingcompliance with the conditions of Corporate Governance is annexed to this Report. Althoughthis is not applicable to company
13. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis forms a part of this annual report and is annexed tothis report.
14. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(5) the Act and based on the representationsreceived from the management the directors hereby confirm that:
i. In the preparation of the annual accounts for the financial year ended March 312020 the applicable accounting standards have been followed along with proper explanationrelating to material departures.
ii. They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at March 31 2020 and of the profit of theCompany for the year ended on March 31 2020.
iii. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act and rules madethereunder as amended for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities.
iv. They have prepared the annual accounts for financial year ended March 31 2020 on a'going concern' basis.
v. They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and have been operating efficiently.
vi. They have devised proper systems to ensure compliance with provisions of allapplicable laws and that such systems were adequate and operating effectively.
15. AUDITORS STATUTORY AUDITORS
Under Section 139 of the Companies Act 2013 and the rules made thereunder it ismandatory to rotate the statutory auditors on completion of the maximum term permittedunder the provisions of Companies Act 2013. In line with the requirements of theCompanies Act 2013 M/s C S Nagendra & Co. Firm of Chartered Accountants (FRN009486S) was appointed as the statutory auditors of the Company. M/s C S Nagendra & Cowill hold office for a period of five years consecutive years from the conclusion of the23rd Annual General Meeting of the Company till the conclusion of the 27th Annual GeneralMeeting to be held in 2023 The requirement for the annual ratification of auditorsappointment at the AGM has been omitted pursuant to Companies (Amendment) Act 2017notified on May 7 2018.
As required under Section 204 of the Companies Act 2013 and Rules thereunder theBoard appointed Mr. Deepak Sadhu a firm of Company Secretaries in practice to undertakethe Secretarial Audit of the Company. The Secretarial Audit Report of the Company for theFinancial Year 2019-2020 is annexed to this Report.
The Company has appointed Ms. Jaya Monga as Internal Auditor of the Company for theFinancial Year 20192020.
16. AUDITOR'S AND SECRETARIAL AUDITOR'S REPORT
There are no disqualifications reservations or adverse remarks or disclaimers in theAuditors and Secretarial Auditors Report.
The Board further confirms that the Company has complied with all the provisions of theSecretarial Standards issued by the Institute of Company Secretaries of India
17. FRAUD REPORTING:
There have been no instances of fraud reported by the Auditors under Section 143(12) ofthe Companies Act and Rules framed thereunder either to the Company or to the CentralGovernment.
18. BOARD'S RESPONSE ON THE REMARKS MADE BY STATUTORY AUDITORS AND SECRETARIAL AUDITORS
There were no qualifications reservations and adverse remarks made by the statutoryauditors in their Audit Report and by the Company Secretary in practice in theirSecretarial Audit report.
19. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The particulars as prescribed under Rule 8(3) of the Companies (Accounts) Rules 2014are set out in an Annexure-I to this Report.
20. ANNUAL RETURN
In compliance with the provisions of section 134 (3)(a) of Companies Act 2013 theextract of Annual Return of the company as per Sub-Section (3) of Section 92 of the act isavailable on the company website of the company www.kmfbuilders.com (Annexure-III)
21. DEPOSIT FROM PUBLIC
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
22. DETAILS OF DIRECTORS OR KMP'S APPOINTMENT OR RESIGNATION DURING THE YEAR
There is a change during the year. The Board approves the resignation of Mr. ShyamSunder Mittra (DIN: 01174462) w.e.f 14.08.2019 as Director of the Company.
Mr. Kavita Chadha Director retires by rotation and being eligible has offeredherself for re-appointment. The Board recommends the same for your approval.
The brief resume of the Directors seeking appointment in the forthcoming Annual GeneralMeeting in Pursuance of Regulation 36(3) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed to the Annual General Meeting Notice.
23. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the Articles of Association of the Company and the provisions of theSection 152(6)(e) of the Companies Act Mrs. Kavita Chadha (DIN: 03304018) will retire byrotation at the ensuing Annual General Meeting and being eligible offered herself forre-appointment. Mr. Gorve Chadha (DIN: 06407884) - Executive Chairman and ManagingDirector Mr. Pradeep Kumar Malik - Chief Financial Officer and Ms. Priyanka Behl -Company Secretary and Compliance Officer are the Key Managerial Personnel of the Companyas at the date of this Report.Mr. Aniruddh Singh and Mr. Chirag Salaria are Non ExecutiveDirectors of the company
24. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received the necessary declaration from each Independent Director inaccordance with Section 149(7) of the Companies Act 2013 that he met the criteria ofindependence as laid out in sub-section (6) of Section 149 of the Companies Act 2013 andthe Regulation 16(1)(B) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
The Board is of the opinion that the Independent Directors of the Company possessrequisite qualifications experience and expertise in the field of finance strategyauditing tax risk advisory financial services and infrastructure and real estateindustry and they hold the highest standards of integrity.
In compliance with the rule 6(1) of the Companies (Appointment and Qualification ofDirectors) Rules 2014 all the independent directors have registered themselves with theIndian Institute of Corporate Affairs. Since majority of the independent directors of theCompany have served as directors or key managerial personnel in listed companies or in anunlisted public company having a paid-up share capital of Rs. 10 crore or more for aperiod not less than 10 years they are not required to undertake the proficiency test asper rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules 2014.
25. BOARD DIVERSITY
A diverse Board enables efficient functioning through differences in perspective andskill and also fosters differentiated thought processes at the back of varied industrialand management expertise gender knowledge and geographical background. The Boardrecognises the importance of a diverse composition and has adopted a Board DiversityPolicy which sets out the approach to diversity.
26. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:
The policy of the Company on directors' appointment and remuneration including criteriafor determining qualifications positive attributes independence of a director and othermatters provided under Section 178(3) of the Companies Actis appended as Annexure III tothis Report
27. BOARD EVALUATION
The performance of the whole-time Director KMP and Senior Management Personnel isevaluated at regular intervals (half yearly/ yearly) by the whole-time Directors/ ManagingDirector as applicable. The performance evaluation of Independent Directors shall be doneby the Board excluding the Director being evaluated basis the contributions made to theBoard deliberations on various matters including business strategy financial strategyoperations cost and risk management etc. and suggestions given in this regard.
A separate meeting of the independent directors ("Annual ID meeting") wasconvened which reviewed the performance of the Board (as a whole) the non-independentdirectors and the Chairman. Post the Annual ID meeting the collective feedback of each ofthe Independent Directors was discussed by the Chairman of the NRC with the Board'sChairman covering performance of the Board as a whole; performance of the non-independentdirectors and performance of the Board Chairman.
Some of the key criteria for performance evaluation are as follows - Performanceevaluation of Directors:
Attendance at Board or Committee meetings
Contribution at Board or Committee meetings
Guidance/support to management outside Board/Committee meetings Performanceevaluation of Board and Committees:
Degree of fulfilment of key responsibilities
Board Structure and composition
Effectiveness of Board Processes information and functioning
Board culture and dynamics
Quality of relationship between Board and Management
Efficacy of communication with external stakeholders
28. MEETINGS OF THE BOARD
A calendar of Meetings is prepared and circulated in advance to the Directors. TheBoard met six times during the financial year the details of which are given in theCorporate Governance Report which is annexed and forms a part of this report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
29. NUMBER OF MEETINGS OF THE BOARD:
The Board met 6 (Six) times in the financial year ended March 31 2020 on May 29 2019Jully 30th 2019 August 14 2019 November 14 2019 and February 14 2020 and March102020.
30. COMPOSITION OF AUDIT COMMITTEE
The Audit Committee of the Company comprises of Independent and Executive members. Board Elect Mr. Aniruddh Singh as Chairman on the place of Mr. Shyam Sunder Mittra Mr.Chirag Salaria and Mr. Pradeep Kumar Malik.The Board has accepted all recommendationsmade by the Audit Committee during the year.
The composition and other relevant details of other board level committees i.e.Nomination and Remuneration Committee and Stakeholders Relationship Committee aredisclosed separately in the Corporate Governance Report which is annexed to and forms apart of this Report.
*Mr. Shyam Sunder Mittra give resign from the post of Director w.e.f 14th August2019
31. CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT
The Directors and members of Senior Management have affirmed compliance with the Codeof Conduct for Directors and Senior Management of the Company. A declaration to thiseffect has been signed by Mr. Gorve Chadha Managing Director and forms part of the AnnualReport.
32. PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code. All Board Directors and the designated employees haveconfirmed compliance with the Code.
33. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The details of loans guarantees and investments covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to the financial statement.
34. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company has not entered into any contract / arrangement /transaction of material nature with any of the related parties which are in conflict withthe interest of the Company. Related party disclosures are given in the notes to thefinancial statement.
35. SIGNIFICANT AND MATERIAL ORDERS BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTINGTHE COMPANY'S GOING CONCERN STATUS AND OPERATIONS IN FUTURE
During the period under review no significant and material orders passed by theregulators or courts or tribunals impacting the going concern status and Company'soperations in the future.
36. ADEQUACY OF INTERNAL FINANCIAL CONTROL
The Company had laid down guidelines policies procedures and structure to enableimplementation of appropriate internal financial controls across the Company. Thesecontrol processes enable and ensure the orderly and efficient conduct of company'sbusiness including safeguarding of assets prevention and detection of frauds and errorsthe accuracy and completeness of the accounting records and timely preparation &disclosure of financial statements.
37. RISK MANAGEMENT
The Risk Management is overseen by the Audit Committee of the Company on a continuousbasis. The Committee oversees Company's process and policies for determining risktolerance and review management's measurement and comparison of overall risk tolerance toestablished levels. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuous basis.
38. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS
The Company has practice of conducting familiarization program of the independentdirectors as detailed in the Corporate Governance Report which forms part of the AnnualReport.
39. DISCLOSURE ON THE NOMINATION AND REMUNERATION POLICY OF THE COMPANY PURSUANT TOSECTION 134(3) (e) AND SECTION 178 (3)
The policy of the Company on Director's appointment and remuneration includingcriteria for determining qualifications independence and other matters as provided undersubsection (3) of Section 178 of the Companies Act 2013 forms part of this Annual Report.
40. VIGIL MECHANISM
The Company has established a vigil mechanism for Directors and employees to reporttheir genuine concerns. For details please refer to the Corporate Governance Reportattached to this Report.
41. CORPORATE SOCIAL RESPONSIBILITY:
A Corporate Social Responsibility (CSR) Committee has been constituted in accordancewith Section 135 of the Companies Act. This is not applicable on our company .
42. DISCLOSURE UNDER SECTION 23 OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company's policy on prevention of sexual harassment of women provides for theprotection of women employees at the workplace and for prevention and redressal of suchcomplaints. There were no complaints pending for the redressal at the beginning of theyear and no complaints received during the financial year.
43. PARTICULARS OF EMPLOYEES:
Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197 of the Companies Act and Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 . The information required pursuant toSection 197 of the Companies Act read with Rule 5(2)&(3) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 in respect of employees of theCompany is available for inspection by the Members at registered office of the Companyduring business hours on working days up to the date of the ensuing Annual GeneralMeeting. If any Member is interested in obtaining a copy thereof such Member may write tothe Company Secretary whereupon a copy would be sent.
44. PARTICULARS OF REMUNERATION
The information required under Section 197(12) of the Act and the Rules madethere-under in respect of employees of the Company is follows:-
(a) ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year;
(Amount in Rs.)
|Name ||Designation ||CTC ||Median Employee salary ||Ratio |
|1. GorveChadha ||Managing Director ||1200000 ||610000 ||1.9:1 |
|2. Pradeep Kumar Malik ||CFO ||400000 ||610000 ||0.65:1 |
(b) the percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary or Manager if any in the financial year; -. Thereis no increase in the remuneration of Company Secretary.
(c) the percentage increase in the median remuneration of employees in the financialyear - There was average increase in the median remuneration of employees in thefinancial year.
(d) the number of permanent employees on the rolls of company: There were 12permanent employees on the rolls of Company as on March 31 2020.
(e) the explanation on the relationship between average increase in remuneration andcompany performance; - There is average increase in the remuneration of employees inthe last financial year.
(f) comparison of the remuneration of the Key Managerial Personnel against theperformance of the company;
|Particulars ||Amount (Rs.) |
|Remuneration of Key Managerial Personnel (KMP) during financial year 2019-2020 (aggregated) ||1928000 |
|Revenue from operations ||17565817 |
|Remuneration (as % of revenue)10.97%Profit before tax (PBT) ||2123115 |
|Remuneration (as % of PBT) ||90.8 |
(g) variations in the market capitalisation of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations of the shares of the Company in comparisonto the rate at which the Company came out with the last public offer in case of listedcompanies and in case of unlisted companies the variations in the net worth of theCompany as at the close of the current financial year and previous financial year; -
|Particulars ||Unit ||As at 31st Mar 2020 ||As at 31st Mar 19 ||Variation |
|Closing rate of share at BSE ||Rs. ||1.45 ||1.72 ||(82.5%) |
|EPS (Consolidated) ||Rs. ||0.10 ||0.23 ||-22.9 |
|Market Capitalization ||Rs. ||17663900 ||20953040 ||(18.62%) |
(h) average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration -
There is no average increase in salaries of employees in 2019-2020 except managingdirector remuneration. There is no increase in the salary of Company secretary in themanagerial remuneration for the financial year .
(i) Comparison of each remuneration of the Key Managerial Personnel against theperformance of the Company
|Particulars ||Managing Director ||Chief Financial Officer ||Company Secretary |
|Remuneration ||1200000 ||400000 ||308000 |
|Revenue ||17565817 ||17565817 ||17565817 |
|Remuneration (as % of revenue) ||6.83 ||2.27 ||1.75 |
|Profits before tax (PBT) ||1460149 ||1460149 ||1460149 |
|Remuneration (as % of PBT) ||82.18 ||27.39 ||21.09 |
(j) The key parameters for any variable component of remuneration availed by thedirectors;
There is no variable component in the remuneration availed by the Directors.
(k) The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year;
Managing Director is the highest paid Director. No employee received remunerationhigher than the Managing Director .
(l) Affirmation that the remuneration is as per the remuneration policy of the Company
It is hereby affirmed that the remuneration paid during the Financial Year ended 31stMarch 2020 is as per the Remuneration Policy of the Company.
45. PECUNIARY RELATIONSHIP OR TRANSACTIONS OF NON-EXECUTIVE DIRECTORS
During the year the Non-Executive Directors of the Company had no pecuniaryrelationship or transactions with the Company.
The Equity shares of your company were listed at Bombay Stock Exchange Limited andDelhi Stock Exchange Limited. However the Delhi Stock Exchange Limited has beende-recognized as a Stock Exchange during the year so presently the Company is listed onBombay Stock Exchange Limited only. The Company has paid listing fees to the Bombay StockExchange for the year 2020-2021.
47. STATUTORY DISCLOSURES
None of the Directors of your Company are disqualified as per provisions of Section164(2) of the Companies Act 2013. Your Directors have made necessary disclosures asrequired under various provisions of the Companies Act 2013 and SEBI (LODR) Regulations2015.
Yours Directors wish to extend their appreciation to business associates for theirsupport and contribution during the year. Yours Directors would also like to thank theemployees shareholders customers suppliers alliance partners and bankers for thecontinued support given by them to the Company and their confidence reposed in themanagement.
The Directors also acknowledge the hard work dedication and commitment of theemployees.
| ||By order of the Board of Directors |
|Place: Delhi ||Gorve Chadha |
|Date:29-11-2020 ||(Chairman & Managing Director) |
| ||DIN:06407884 |
| ||Add: - U-2 Green Park Main Delhi-110016 |