Konark Synthetic Ltd.
|BSE: 514128||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE517D01019|
|BSE 00:00 | 16 Aug||Konark Synthetic Ltd|
|NSE 05:30 | 01 Jan||Konark Synthetic Ltd|
|BSE: 514128||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE517D01019|
|BSE 00:00 | 16 Aug||Konark Synthetic Ltd|
|NSE 05:30 | 01 Jan||Konark Synthetic Ltd|
Konark Synthetic Limited
Your Directors present the 35th Annual Report together with the AuditedStandalone and Consolidated Financial Statements of the Company for the financial yearended on 31st March 2019.
(Rs. in Lakhs)
REVIEW OF BUSINESS OPERATIONS:
During the year under review the Company earned total revenue of Rs. 7879.05 Lakhs asagainst Rs. 9777.50 Lakhs in the previous year. The profit before tax was Rs. (173.24)Lakhs as against Rs (107.02) Lakhs in previous year. The profit after tax was Rs. (151.30)Lakhs as against Rs. (64.23) Lakhs in the previous year.
The year under review was one of the most challenging years for the textile sectoracross the world. Despite the extreme difficultly in the business environment the Companyhas managed to survive and earned revenue from the operations. The Company continues tofocus on measures to improve the efficiency of financial performance. Your Directors areoptimistic about the future growth of the Company and are putting their best efforts toaccelerate the growth speed.
There was no change in Share Capital of the Company during the year 2018-19. As on 31stMarch 2019 the paid up share capital of the Company stood at Rs. 58080000/-(RupeesFive Crores Eighty Lakhs and Eighty Thousand Only) divided into 5808000 Equity shares ofRs. 10/- (Rupee Ten) each.
To conserve the resources for future business requirements of the Company yourDirectors do not recommend any payment of dividend for the year under review.
During the year the Company has not transferred any amount to General Reserves.
During the year under review the Company has not accepted any deposits within themeaning of Section 73 and 76 of the Companies Act 2013 read with Companies (Acceptance ofDeposits) Rules 2014.
EXTRACT OF ANNUAL RETURN:
Pursuant to Section 92(3) of the Companies Act 2013 read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of the Annual Return ofthe Company in Form MGT-9 is annexed as Annexure I' and forms an integralpart of this report. The Annual Return as referred in Section 134(3)(a) of the CompaniesAct 2013 for the financial year ended March 31 2019 shall be placed on the website ofthe Company at https://www.konarkgroup.co.in.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of Section 152 of the Companies Act 2013 read withCompanies (Management and Administration) Rules 2014 and the Articles of Association ofthe Company Mr. Prakashchand Dalmia (DIN: 00005813) Director of the Company retires byrotation at the ensuing Annual General Meeting and being eligible has offered himself forre-appointment and your Board recommends his reappointment.
Mr. Satish Deshmukh (DIN:00005864) was re-appointed as an Independent Director of theCompany for the second term of five years w.e.f. 1st April 2019.
DECLARATION OF INDEPENDENT DIRECTORS:
The Company has received declaration from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under Section 149(6)of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES:
The policy on Director's appointment and remuneration including criteria fordetermining qualifications positive attributes independence of Directors and alsoremuneration for Key Managerial Personnel and other employees is attached herewith andmarked as 'Annexure II'.
ANNUAL PERFORMANCE EVALUATION BY THE BOARD:
Pursuant to the provisions of the Section 134(3) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an evaluation of itsown performance the directors individually as well as the evaluation of the working ofits Audit Nomination & Remuneration and Stakeholders' Relationship Committees. TheBoard has devised questionnaire to evaluate the performances of each of executive andnon-executive and Independent Directors. Such questions are prepared considering thebusiness of the Company and the expectations that the Board have from each of thedirectors. The evaluation framework for assessing the performance of Directors comprisesof the following key areas:
i. Attendance at Board Meetings and Board Committee Meetings;
ii. Quality of contribution to Board deliberations;
iii. Strategic perspectives or inputs regarding future growth of Company and itsperformance;
iv. Providing perspectives and feedback going beyond information provided by themanagement.
The details of the programmes for familiarization of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company and related matters are put upon the website of the Company at the link: http://www.konarkgroup.co.in/investorrelation/policies/Familiarisation programme for Independent Directors.
MEETINGS OF THE BOARD:
The Board meets at regular intervals to discuss and decide on Company / business policyand strategy apart from other Board business. A tentative annual calendar of the Board andCommittee Meetings is informed to the Directors in advance to facilitate them to plantheir schedule and to ensure meaningful participation in the meetings.
The Board met seven times during the financial year the details of which are given inthe Corporate Governance Report. The intervening gap between the two consecutive meetingswas within the period prescribed under the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
DIRECTORS' RESPONSIBILITY STATEMENT:
Your Directors to the best of their knowledge and belief and according to theinformation and explanation obtained by them and as required under Section 134(3)(c) ofthe Companies Act 2013 state that: a. in the preparation of the annual accounts theapplicable Accounting Standards have been followed along with proper explanation relatingto material departures if any;
b. the directors have 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 as at 31stMarch 2019 and of the loss of the company for that period;
c. the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d. the directors have prepared the annual accounts on a going concern basis;
e. the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
f. the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF MANEGERIAL REMUNERATION AND OTHER DETAILS:
Disclosure with respect to the remuneration of Directors and employees as requiredunder Section 197(12) of the Companies Act 2013 and Rule 5 of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed herewith and marked as 'AnnexureIII'.
SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS:
As on 31st March 2019 the Company has one subsidiary company i.e. IndiaDenim Limited and one Associate Company i.e Konark Infratech Pvt. Limited. During theyear the Board of Directors reviewed the affairs of the subsidiary Company. As perSection 129(3) of Companies Act 2013 the Company has prepared a consolidated financialstatement of the Company along with India Denim Limited (Subsidiary) and Konark InfratechPrivate Limited (associate company) which form part of the Annual Report. Further astatement containing the salient features of the financial statements of the subsidiary inthe prescribed format AOC-1 is attached herewith and marked as 'Annexure IV'. Thestatement also provides the details of performance and financial position of thesubsidiary and associate.
In accordance with the provision of Section 136 of the Companies Act 2013 the auditedfinancial statements including the consolidated financial statements and relatedinformation of the Company and audited accounts of its subsidiary are available on ourwebsite www.konarkgroup.co.in. These documents will also be available for inspection atthe registered office of the Company and of the subsidiary company during business hourson all working days and during the Annual General Meeting.
The Company has one associate company namely Konark Infratech Pvt. Limited by virtue ofits holding of more than 20% of the respective equity share capital of this company.
AUDIT COMMITTEE AND ITS COMPOSITION:
The Audit Committee comprised of Mr. Satish Deshmukh Ms. Suvriti Gupta IndependentDirectors and Mr. Prakashchand Dalmia Director of the Company.
Mr. Satish Deshmukh is the Chairman of Audit Committee of the Company. The ComplianceOfficer and Company Secretary of the Company acts as the Secretary to the Committee.
The Audit Committee of the Company reviews the reports to be submitted to the Board ofDirectors with respect to auditing and accounting matters. It also supervises theCompany's internal control financial reporting process and vigil mechanism.
Other details with respect to Audit Committee are given in Corporate GovernanceReport..
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the applicable provisions of the Companies Act 2013 read with the IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 ('the Rules') all unpaidor unclaimed dividends are required to be transferred by the Company to the IEPFestablished by the Government of India after the completion of seven years. Furtheraccording to the Rules the shares on which dividend has not been paid or claimed by theshareholders for seven consecutive years or more shall also be transferred to the demataccount of the IEPF Authority. Accordingly the Company has transferred the unclaimed andunpaid dividends of Rs. 88924. Further 17190 corresponding shares were transferred asper the requirements of the IEPF rules. The details are available on our website atwww.konarkgroup.co.in.
RISKS AND AREAS OF CONCERN:
The Company has laid down a well-defined Risk Management Policy covering the riskmapping trend analysis risk exposure potential impact and risk mitigation process. Adetailed exercise is being carried out to identify evaluate manage and monitoring ofboth business and non-business risk. The Board periodically reviews the risks and suggestssteps to be taken to control and mitigate the same through a properly defined framework.All major properties of the Company are insured.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION188(1) OF THE COMPANIES ACT 2013:
All transactions with the related parties entered during the year were in ordinarycourse of the business and on arm's length basis. No Material Related Party Transactionwas entered during the year by your Company as per Section 188 of the Companies Act 2013.Accordingly the disclosure of Related Party Transactions as required under Section 134(3)of the Companies Act 2013 in Form AOC-2 is not applicable.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013:
The details as required under Section 186 of the Companies Act 2013 of loans andguarantee made by your Company during the financial year 2018-19 are given under Notes toAccounts on financial statements. The Company has not made any investments during theyear.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
There was no significant or material order passed by any regulator or court ortribunal which impacts the going concern status of the Company or will have bearing onCompany's operations in future.
INTERNAL FINANCIAL CONTROL WITH REFRENCE TO THE FINANCIAL STATEMENTS:
The Company has Internal Financial Control System commensurate with the size scale andcomplexity of its operations. The Company monitors and evaluates the efficacy and adequacyof internal control system in place its compliance with operating systems accountingprocedures and policies.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT:
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which these financial statements relateand the date of this report.
WHISTLE BLOWER/VIGIL MECHANISM POLICY:
The Company has a Vigil Mechanism / Whistle Blower Policy to deal with instance offraud and mismanagement if any. The mechanism also provides for adequate safeguardsagainst victimization of directors and employees who avail of the mechanism and alsoprovide for direct access to the Chairman of the Audit Committee in the exceptional cases.The details of the Vigil mechanism Policy is explained in the Corporate Governance Reportand also posted on the website of the Company. We affirm that during the financial year2018-19 no employee or director was denied access to the Audit Committee.
Pursuant to the provisions of Section 139(1) of the Companies Act 2013 and the Rulesframed thereunder M/s. Pansari & Dalmia Chartered Accountants (Firm Registration No.107370W) Mumbai were appointed as Statutory Auditors of the Company at the 34thAnnual General Meeting for a term of five consecutive years from the conclusion of the 34thAnnual General Meeting till the conclusion of 39th Annual General Meeting to beheld for the year ending 31st March 2023.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial (Personnel) Rules 2014 the Company hasre-appointed M/s. KRS AND CO. Company Secretaries Mumbai to undertake Secretarial Auditof the Company for the year 2018-19. The Secretarial Audit Report is annexed herewith as 'AnnexureV' and forms part of this report.
The Company has appointed M/s. Kaushik Shahukar & Co. Chartered AccountantsMumbai as its Internal Auditors. The Internal Auditors give their reports on quarterlybasis to the Audit Committee.
Based on the report of internal audit management undertakes corrective action inrespective areas and thereby strengthens the controls.
REMARKS ON QUALIFICATION BY STATUTORY AUDITORS AND SECRETARIAL AUDITORS:
The Statutory Auditors' report does not have any qualification / observation/adverseremark and is self-explanatory.
With respect to the observations made by Secretarial Auditors in their report we wouldlike to state an under:
The Company has not extended any interest free loan as per the request receivedfrom subsidiary company the Company has not charged interest on loans given to itconsidering its financial position and the loans given are repayable on demand.
Since the financials of the Company were not ready the annual auditedconsolidated financial results and audited consolidated financial accounts were adopted on11th June 2018
The Company is generally regular in depositing amounts deducted/ accrued in thebooks of account in respect of undisputed statutory dues including Provident FundEmployee's State Insurance and GST. However in case of its Bangalore Unit there have beensome delays in payment of such payments due to internal administrative delays
REPORT ON CORPORATE GOVERNANCE:
Pursuant to Regulation 34(3) and Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the following have been made a part of theAnnual Report and are attached to this report:
Management Discussion and Analysis Report;
Corporate Governance Report; and
Practicing Company Secretary's' Certificate regarding compliance of conditionsof Corporate Governance.
LISTING OF SECURITIES:
The Company's shares are listed on BSE Limited (BSE) under the script code 514128. Thepayment of Annual Custodial Fees to BSE Limited for the financial year 2019-2020 is underprocess.
INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
The Company has zero tolerance for sexual harassment at workplace and adopted a Policyon prevention prohibition and redressal of sexual harassment at workplace in line withthe provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules thereunder. There was no complaint on sexual harassmentduring the year under review.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
Details regarding conservation of energy technology absorption foreign exchangeearnings and outgo is given in 'Annexure VI'.
CORPORATE SOCIAL RESPONSIBILITY:
Provisions Section 135 of the Companies Act 2013 read with the Companies (CorporateSocial Responsibility Policy) Rules 2014 are not applicable to the Company during theyear under review
Your Directors take this opportunity to express their sincere appreciation for theassistance and co-operation received from all the Government departments Banks FinancialInstitutions other business constituents and members during the year under review andalso look forward to their continued support in the future.
Your Directors also wish to place on record their deep appreciation for the committedservices of the employees of the Company.