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Krishana Fabrics Ltd.

BSE: 539446 Sector: Financials
NSE: N.A. ISIN Code: INE627Q01018
BSE 05:30 | 01 Jan Krishana Fabrics Ltd
NSE 05:30 | 01 Jan Krishana Fabrics Ltd

Krishana Fabrics Ltd. (KRISHANAFABRICS) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting the 35th Annual Report of yourCompany together with the Audited Statements of Accounts for the year ended March 312016.

(Rs. in Lac)
Financial Results Year Ended 31.03.2016 Year Ended 31.03.2015
Income 223.45 1053.55
Profit /(Loss) before Tax & Extraordinary Items (16.23) 1.41
Less : Provision for Taxation 0.00 1.59
Profit / (Loss) after Tax (16.23) (0.18)
Less : Extra-Ordinary Items 0.00 0.00
Add: Profit brought forward from previous year 26.80 26.98
Balance of Profit carried forward to next year 10.57 26.80

OVERVIEW OF ECONOMY

The Indian economy has emerged as a bright spot in the world economy becoming one ofthe fastest growing large economies in the world. The 7.6 per cent growth in the GDP atconstant market prices in 2015-16 according to the advanced estimates of the CentralStatistics Office compares favourably with growth in the previous three years; 7.2 percent in 2014-15 6.6 per cent in 2013-14 and 5.6 per cent in 2012-13. It is noteworthythat this growth is estimated to be achieved despite subdued global demand that dampenedIndia’s exports significantly and two consecutive below-normal monsoons thatimpacted farm output and productivity.

The macroeconomic stability has improved substantially with the continuance of fiscalprudence lower inflation lower current account deficit and robust foreign exchangereserves. The year 2015-16 witnessed the government doing a fine balancing act i.e.meeting the requirements of higher untied devolution to states and Union Territories asper the recommendations of the Fourteenth Finance Commission and keeping fiscal prudencewhile also stepping up capital expenditure. The current year also experienced moderationin general price level with significant decline in the price of Indian basket of crudeoil and commodity prices coupled with astute food supply management policy of theGovernment. Low levels of current account deficit coupled with moderate rise in capitalinflows resulted in accretion in foreign exchange reserves by US$ 10.6 billion in thefirst half of 2015-16. India’s foreign exchange reserves were at US$ 351.5 billion ason February 5 2016. All this shows that the Indian economy has effectively weathered theglobal challenges and the near term growth prospects appear bright

OVERALL PERFORMANCE & OUTLOOK

Gross revenue from operations remained at Rs. 223.45 lac in comparison to lastyears’ figure ofRs. 1053.55 lac. During the year the net loss from operationswidened and the same was stood at Rs. (16.23) lac in comparison to last years’ NetLoss of Rs. (0.18) lac.

Your Company is into the investment activities in Shares & Securities and is alsodoing treasury operations by way of providing financial solutions to HNIs and BodyCorporate.

The Company is hopeful of recovering from losses in current financial year.

DIVIDEND

Due to losses incurred during the year your Directors do not recommend any Dividendfor the year under review.

During the year under review no amount was being transferred to General Reserve.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31 2016 was Rs. 3.0634 Crore. During theyear under review the Company has not issued shares with differential voting rights norgranted stock options nor sweat equity. As on March 31 2016 none of the Directors and/orKey Managerial Person of the Company hold instruments convertible in to Equity Shares ofthe Company.

FINANCE AND ACCOUNTS

Your Company prepares its financial statements in compliance with the requirements theCompanies Act 2013 and the Generally Accepted Accounting Principles (GAAP) in India. Thefinancial statements have been prepared on historical cost basis. The estimates andjudgments relating to the financial statements are made on a prudent basis so as toreflect in a true and fair manner the transactions and reasonably present theCompany’s state of affairs profits/(loss) and cash flows for the year ended 31stMarch 2016.

The Company continues to focus on judicious management of its working capitalreceivables inventories and other working capital parameters were kept under strict checkthrough continuous monitoring.

There is no audit qualification in the standalone financial statements by the statutoryauditors for the year under review.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Details of Loans Guarantees and Investments if any covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to the Financial Statements.

SUBSIDIARY COMPANY

The Company does not have any material subsidiary whose net worth exceeds 20% of theconsolidated net worth of the holding company in the immediately preceding accounting yearor has generated 20% of the consolidated income of the Company during the previousfinancial year. Accordingly a policy on material subsidiaries has not been formulated.

RELATED PARTY TRANSACTIONS

All transactions entered into with Related Parties as defined under the Regulation 23of Listing Regulations; during the financial year were in the ordinary course and on anarm’s length pricing basis and do not attract the provisions of Section 188 of theCompanies Act 2013 and the Rules made thereunder are not attracted and thus disclosure inform AOC-2 in term of Section 134 of Companies Act 2013 is not required. Further thereare no materially significant transactions with related parties during the financial yearwhich were in conflict with the interest of the Company. Suitable disclosure as requiredby the Accounting Standards (AS18) has been made in the notes to the Financial Statements.The policy on Related Party Transactions as approved by the Board is uploaded on theCompany’s website viz. www.krishana.co.in

MANAGEMENT DISCUSSIONS & ANALYSIS

As required by Regulation 34 of Listing Regulations the Management Discussion andAnalysis is annexed and forms part of the Directors’ Report.

MANAGEMENT

There is no change in management of the Company during the year under review andpromoters are continued to remain as members of the Company.

DIRECTORS

There was no change in composition of Board during the year under review.

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16 (b) of the Listing Regulations.

Further none of the Directors of the Company are disqualified under sub-section (2) ofSection 164 of the Companies Act 2013.

INDEPENDENT DIRECTORS

As per provisions of section 149 of the 2013 Act independent directors shall holdoffice for a term up to five consecutive years on the board of a company but shall beeligible for re-appointment for another term up to five years on passing of a specialresolution by the company and disclosure of such appointment in Board’s Report.Further Section 152 of the Act provides that the Independent Directors shall not be liableto retire by rotation in the Annual General Meeting (‘AGM’) of the Company.

As per requirements of Regulation 25 of SEBI LODR Regulations 2015 a person shall notserve as an independent director in more than seven listed entities: provided that anyperson who is serving as a whole time director in any listed entity shall serve as anindependent director in not more than three listed entities. Further independentdirectors of the listed entity shall hold at least one meeting in a year without thepresence of non-independent directors and members of the management and all theindependent directors shall strive to be present at such meeting.

DETAILS OF DIRECTORS / KMP APPOINTED AND RESIGNED DURING THE YEAR

Sl. No. Name Designation Date of Appointment Date of Resignation
1. Mr. Nrusingha Charan Behera Company Secretary - 30th Dec 2015

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS TRIBUNALS OR COURTS

There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status of the Company and its future operations.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THEFINANCIAL YEAR AND DATE OF REPORT

There have been no material changes and commitments affecting the financial position ofthe Company between the end of Financial Year and date of the report.

LISTING OF SHARES ON BSE

Equity Shares of the Company have been listed on BSE and have been admitted for tradingw.e.f. 6th November 2015.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3)(c) of the Companies Act 2013 the Board ofDirectors confirms that:

1. that in the preparation of the Annual Accounts for the year ended March 31 2016the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;

2. 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 as at March 31 2016 and of the profit ofthe Company for the year ended on that date;

3. 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;

4. the annual accounts have been prepared on a going concern basis;

5. that the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

6. that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

INFORMATION TECHNOLOGY

Innovation and Technology are synonymous with the Company. The investment in technologyacts as a catalyst and enables the Company to be innovative.

BUSINESS RISK MANAGEMENT

Risk management is embedded in your Company’s operating framework. Your Companybelieves that managing risks helps in maximizing returns. The Company’s approach toaddressing business risks is comprehensive and includes periodic review of such risks anda framework for mitigating controls and reporting mechanism of such risks. The riskmanagement framework is reviewed periodically by the Board and the Audit Committee.

However provision of Regulation 21 of Listing Regulations for constitution of RiskManagement Committee is not applicable to the Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit (IA) functionis defined in the Internal Audit Charter. To maintain its objectivity and independencethe Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficiency and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies. Based on the report of internal audit function process ownersundertake corrective action in their respective areas and thereby strengthen the controls.Significant audit observations and corrective actions thereon are presented to the AuditCommittee of the Board.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy to report genuine concerns or grievances. TheWhistle Blower Policy has been posted on the website of the Company i.e.www.krishana.co.in

RESEARCH & DEVELOPMENT

The Company believes that technological obsolescence is a reality. Only progressiveresearch and development will help us to measure up to future challenges andopportunities. We invest in and encourage continuous innovation. During the year underreview expenditure on research and development is not significant in relation to thenature size of operations of your Company.

AUDITORS

Statutory Auditors

The Auditors M/s. Manish Mitesh & Associates Chartered Accountants Chennai (FRN -014791S) who are Statutory Auditors of the Company and holdstheofficeuntil the conclusionof ensuing Annual General Meeting and are recommended for re-appointment to audit theaccounts of the Company from the conclusion of the 35th Annual General Meetingup to the conclusion of the 39th consecutive Annual General Meeting (subject toratification by the members at every subsequent AGM). As required under the provisions ofSection 139 & 142 of the Companies Act 2013 the Company has obtained writtenconfirmation from M/s. Manish Mitesh & Associates; that their appointment if madewould be in conformity with the limits specified in the said Section.

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 the Company hasappointed Mr. Shrenik J Nahata (C. P. No. 8209) a Company Secretaries in practice toundertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Reportis annexed elsewhere in this Annual Report.

Internal Auditors

The Company has appointed M/s Ashwini & Associates Chartered Accountants Chennai(FRN - 0075633) as Internal Auditors of the Company for current financial year 2016-2017.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 as requiredunder section 92 of the Companies Act 2013 is annexed elsewhere in this Annual Report.

PARTICULARS OF EMPLOYEES

The Company wishes to place on record their appreciation to the contribution made bythe employee of the Company during the period.

During the year under review there were no employees who were in receipt of theremuneration beyond the limits prescribed under Rule 5 (2) of Companies (Appointment andRemuneration) Rules 2014 and therefore no disclosures need to be made under the saidsection.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013 READ WITH RULES

Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 read with Rules thereunder the Companyhas not received any complaint of sexual harassment during the year under review.

PARTICULARS UNDER SECTION 134(3)(m) OF THE COMPANIES ACT 2013

Since the Company is into the business of financing and trading/investments activitiesin shares and securities; the information regarding Conservation of Energy TechnologyAbsorption Adoption and Innovation as defined under section 134(3)(m) of the CompaniesAct 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is reported to beNIL.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has not earned or used foreign exchange earnings/outgoings during the yearunder review.

PUBLIC DEPOSITS

During the year under review your Company has not accepted any deposit from the publicfalling within the ambit of Section 73 of the Companies Act 2013 and The Companies(Acceptance of Deposits) Rules 2014.

REPORT ON CORPORATE GOVERNANCE

The Company conforms to the norms of Corporate Governance as envisaged in the CompaniesAct 2013 and the Listing Regulations. Pursuant to Regulation 27 of Listing Regulations aReport on the Corporate Governance and the Auditors Certificate on Corporate Governanceare annexed to this report.

CAUTIONARY STATEMENT

Statements in this Directors’ Report and Management Discussion and Analysisdescribing the Company’s objectives projections estimates expectations orpredictions may be "forward-looking statements" within the meaning of applicablesecurities laws and regulations. Actual results could differ materially from thoseexpressed or implied.

APPRECIATION

Your Directors wish to place on record their appreciation towards the contribution ofall the employees of the Company and their gratitude to the Company’s valuedcustomers bankers vendors and members for their continued support and confidence in theCompany.

Chennai May 30 2016 By order of the Board
For KRISHANA FABRICS LIMITED
Registered Office : ANITHA MAHESH
18/19 1st Floor Erulappan Street (DIN : 03573740)
Sowcarpet Chennai-600 079 Chairman

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