Your Directors are pleased to present their 30th Annual Report on the affairs of theCompany together with the Consolidated and Standalone Audited Financial Statements for theFinancial Year ended on 31st March 2020.
The summarized financial results for the year vis-a-vis the previous year are asfollows:
|PARTICULARS || |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Revenue from Operations ||53421.73 ||56901.57 ||54871.60 ||58765.93 |
|Other Income ||187.16 ||212.12 ||170.30 ||214.80 |
|Total Revenue ||53608.89 ||57113.69 ||55041.90 ||58980.73 |
|Operating Expenses ||48895.62 ||53993.39 ||50359.43 ||55840.31 |
|EBITDA ||4713.27 ||3120.30 ||4682.47 ||3140.42 |
|Finance Cost ||1725.71 ||1477.20 ||1744.74 ||1517.16 |
|Depreciation ||715.16 ||596.29 ||743.50 ||624.63 |
|Profit/ (Loss) before Exceptional Items and Tax ||2272.40 ||1046.81 ||2194.23 ||998.63 |
|Exceptional Items (Impairment Loss) ||116.55 ||- ||116.55 ||- |
|Tax Expenses ||231.93 ||385.31 ||228.62 ||397.95 |
|Profit/ (Loss) after Tax ||1923.92 ||661.50 ||1849.06 ||600.68 |
During the Financial Year ended on 31st March 2020 your Company has achieved onstandalone basis a operational turnover of H53421.73 Lakhs as against an operationalturnover of H56901.57 Lakhs in the previous Financial Year and the Profit after Tax is H1923.92 Lakhs as against Profit after Tax of H661.50 Lakhs in the previous Financial Year.The profit margin of the company has been substantially increased as compared to theprevious year due to the strict control of the operating and financial cost.
On consolidate basis your Company achieved operational turnover of H54871.60 Lakhs asagainst operational turnover of H58765.93 Lakhs in the previous Financial Year and ProfitAfter Tax of H1849.06 Lakhs as against Profit after Tax of H600.68 Lakhs in the previousFinancial Year.
In the last month of FY 2020 the COVID-19 pandemic developed rapidly into a globalcrisis forcing governments to enforce lockdowns of all economic activity. For theCompany the focus immediately shifted to ensuring the health and well-being of allemployees and on minimizing disruption to services for all our customers globally. Sincethe Company is the manufacturer of premium quality piping products and solutionaccessories gas
piper telecom ducts submersible pipes and casing pipes the operations of the plantwas completely closed from 25th March 2020 to 26th April 2020. After 26th April 2020plant was in operation at 30% level and gradually improved to around 50-60% level.However workers attendance was very low due to restrictions on movements. Resulting partworking of the plant initially effected and the same is being improved gradually. ThePlant is operating with complete compliance of all directives related to maintaining ofSocial Distancing and mandatory to wear face mask and have proper sanitizations.
It is expected that there will be good demand for agricultural pipes but institutionalsales will depend upon government initiatives for infra projects. Thus impactingCompanies profitability to some extent though your Board is confident about the adequatemanagement of the liquidity position of the Company.
Your directors pleased to recommend a dividend @ 15% (H0.15/-per equity shares of Re.1/- each on 49603520 Equity Shares) for the Financial Year 2019-20 aggregating toH74.40 Lakhs (Previous year @ 15% (H0.15/-per equity shares of Re. 1/- each on 49603520Equity Shares) payable to those Shareholders whose names appear in the Register of Membersas on the Book Closure/Record Date i.e. 1st August 2020
Members are requested to note that pursuant to Finance Act 2020 dividend if anydeclared by the Company will be taxable in the hands of shareholders w.e.f. April 12020and the Company shall be required to deduct tax at source from dividend paid toshareholders at the prescribed rates as notified by the Finance Act 2020.
CHANGE IN CONTROL AND NATURE OF BUSINESS
There is no change in control and nature of business activities during the period underreview.
There is no transfer of business during the period under review. TRANSFER TORESERVES
During the year the Company has not transferred any amount to the general reserves orany other reserves. However in previous year H50.00 Lakhs was transferred to the generalreserves.
The paid-up Equity Share Capital as on 31st March 2020 was H496.04 Lakhs divided into49603520 equity shares of Re. 1/- each. There is no change in Equity Share Capital ofthe Company during the year the shares of the Company's are listed and traded at the BSELtd.
Your Company has not accepted deposit from the public falling within the ambit ofsection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 and there were no remaining unclaimed deposits as on 31st March 2020. Further theCompany has not accepted any deposit or loans in contravention of the provisions of theChapter V of the Companies Act 2013 and the Rules made there under.
|S. No. ||Particulars ||Amt in H |
|1. ||Details of Deposits accepted during the year ||Nil |
|2. ||Deposits remaining unpaid or unclaimed at the end of the year ||Nil |
|3. ||Default in repayment of deposits ||N.A. |
| ||At the beginning of the year || |
| ||Maximum during the year || |
| ||At the end of the year || |
|4. ||Deposits not in compliance with law ||N.A. |
|5. ||NCLT/ NCLAT orders w.r.t. depositors for extension of time and penalty imposed ||N.A. |
Further your Company is in process to file Form DPT-3 for the F.Y. ended on 31.03.2020for the amount received by the Company which is not under the purview of section 73 of theCompanies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014 as amendedfrom time to time
DIRECTORS AND KEY MANAGERIAL PERSONNEL DIRECTORS
The Members at the 29th Annual General Meeting of the Company held on 14th August2019 pursuant to the provisions of Section 152 approved the appointment of Mr. SaurabhSingh Mehta (00023591) Director who was liable to retire by rotation and being eligibleoffered himself for reappointment and the members at the 29th Annual General Meeting havere- appointed Mrs. Purnima Mehta as the Whole Time Director of the Company for a term of 3years w.e.f. 1st July 2019 to 30th June 2022.
In accordance with the provisions of section 149152 and schedule IV of the CompaniesAct 2013 the two Independent directors namely CA Manoj Fadnis and Mr. Rakesh Kalra werere-appointed for a second term of five consecutive years commencing from 1st April 2019till 31st March 2024 by the members at the 29th Annual General Meeting of the Company.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Shiv Singh Mehta (DIN 00023523) Managing Director of theCompany is liable to retire by rotation at the ensuing Annual General Meeting and beingeligible has offered himself for re-appointment.
Pursuant to the provisions of sections 149 and 152 read with Schedule IV and otherapplicable provisions if any of the Companies Act 2013 and the Companies (Appointmentand Qualification of Directors) Rules 2014 and the applicable provisions of the SEBI(LODR) Regulations Shri Chandrasekharan Bhaskar (DIN: 00003343) proposed forre-appointed as an Independent Director of the Company in the ensuing Annual GeneralMeeting not liable to retire by rotation and to hold office for a second term of 5 (five)consecutive years w.e.f. 12th May 2021 to 11th May 2026."
Necessary information on the Director (s) seeking appointment/ reappointment has beengiven in the Notice of the ensuing Annual General Meeting.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under section149(6) of the Companies Act 2013 and the SEBI Listing Regulations. The Board consideredand formed an opinion that the independent directors meet the criteria of independence asrequired under the Companies Act 2013 and the SEBI (LODR) Regulations 2015.
KEY MANAGERIAL PERSONNEL
The following are the Key Managerial Personnels (KMPs) of the Company during the periodunder review:
i) Mr. Shiv Singh Mehta (DIN 00023523) Chairman & Managing Director;
ii) Mrs. Purnima Mehta (DIN 00023632) Whole-time Director;
iii) Mr. Kamal Kanodia Chief Financial Officer;
iv) Ms. Preeti Sharma Company Secretary and Compliance Officer (ceased w.e.f. 4thNovember 2019);
v) Ms. Apeksha Baisakhiya Company Secretary and Compliance Officer (appointed w.e.f.26thFebruary 2020).
There is no change in the KMPs of the Company except the resignation and appointment ofthe Company Secretary and Compliance Officer during the period under review.
The Board of Directors of the Company is committed to get its performance evaluated inorder to identify its strengths and areas in which it may improve its functioning. To thatend the Nomination and Remuneration Committee (NRC) has established the process forevaluation of performance of Directors including Independent Directors the Board and itsCommittees. The evaluation of performance of Executive Directors is done by IndependentDirectors.
The Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees and other individual Directors which includes criteria and process forperformance evaluation of the Non-Executive Directors and Executive Directors to judge theknowledge to perform the role time and level of participation performance of dutiesprofessional conduct independence etc. The appointment/re-appointment/ continuation ofDirectors on the Board shall be based on the outcome of the evaluation process.
During the year under review as per the policy for the performance evaluation formalevaluation of performance of Directors including Independent Directors the Board and itsCommittees was made by the Independent Directors and the NRC in their respective meetingsand the evaluation result was placed before the Board for its information andconsideration.
During the year five (5) Board Meetings were convened and held. The details of whichare given in the Corporate Governance Report. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013/SEBI (LODR) Regulations 2015.
NOMINATION & REMUNERATION POLICY
The Company has a policy for selection and appointment of Directors Key ManagerialPersonnel and Senior Management Personnel and for determination of their remuneration. Thesalient features of Nomination & Remuneration Policy is stated in the CorporateGovernance Report. The Nomination & Remuneration Policy duly approved by the Board hasbeen posted on the Company's website http://kritiindustries.com/
COMMITTEES OF THE BOARD
In accordance with the Companies Act 2013 and SEBI (LODR) Regulations 2015 and otherpurposes the Board has the following four (4) committees:
i) . Audit Committee
ii) . Nomination and Remuneration Committee
iii) . Stakeholders' Relationship Committee
iv). Corporate Social Responsibility Committee
Apart from the aforesaid committees under the Companies Act
2013 and the SEBI (LODR) Regulations 2015 the Company has also constituted InternalComplain Committee (ICC) under the Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013. A detailed note on the Committees is provided inthe Corporate Governance Report.
HOLDING SUBSIDIARY COMPANY AND ASSOCIATE COMPANY
Kriti Auto & Engineering Plastics Private Limited is the Wholly Owned Subsidiary ofyour Company Statement in respect of the same as required under section 129 of theCompanies Act 2013 read with Rule 5 of the Companies (Accounts) Rules 2014 in FormAOC-I is attached as "Annexure A" and forms part of this report.
The Wholly owned Subsidiary of the Company Kriti Auto & Engineering PlasticsPrivate Limited is working in the Automobile industry. The Automobile industry has beengoing through difficult times due to the outbreak of COVID-19 and consequent globallockdown. During the year under review the operational turnover of H1449 Lakhs has beenobserved as against an operational turnover of H1864 Lakhs in the previous Financial Year.Thus your Company being the holding company has impaired the investment by makingprovisions of 15% in its books of accounts amounting to H 116.55 lakhs.
Further that your company is a subsidiary of Sakam Trading Private Limited which holdsabout 52.10% of the total paid-up capital of the company
RELATED PARTY TRANSACTIONS
During the period under review all related party transactions that were entered wereon an arm's length basis and were in the ordinary course of business. There are nomaterially significant related party transactions made by the Company with PromotersDirectors KMPs or other designated persons which may have a potential conflict with theinterest of the Company at large. Since there is no material related party transactionsin the company. Therefore the company is not required to attach Form AOC-2 with thisreport.
Separate disclosure as per regulation 34(3) and 53(f) of SEBI (LODR) Regulations 2015is made in the report. The policy on Related Party Transactions duly approved by the Boardhas been posted on the Company's website http://kritiindustries.com/.
CORPORATE SOCIAL RESPONSIBILITY
The Annual Report on CSR activities is attached as "Annexure B" and forms apart of this Report. The salient features of CSR policy are stated in aforesaid Report onCSR activities. The policy on CSR duly approved by the Board has been posted on theCompany's website http://kritiindustries.com/.
DISCLOSURE FOR PARTICULARS OF EMPLOYEES
The information required pursuant to section 197(12) of the Companies Act 2013 readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules
2014 as amended in respect of employees of the Company forming part of Directors'Report is given in "Annexure C" to this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is attached as "Annexure D" andforms part of this report.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The details of Loans Guarantees and Investment are given in the notes to the FinancialStatements. Hence no further disclosure is being given here to avoid repetition.
The report on Corporate Governance as stipulated under Regulation 34(3) read withSchedule V of the SEBI (LODR) Regulations 2015 along with the requisite certificate fromthe Secretarial Auditor of the Company confirming compliance with the conditions of thecorporate governance is appended and forms a part of this report along with thecertificate of Disqualification of Directors received from Practicing Company Secretary asthe Annexure 1 and 2 of the Corporate Governance Report.
The Company has a well defined process to ensure the risks are identified andmitigation steps are put in place. The Company's Risk Management process focus on ensuringthat these risks are identified on a timely basis and reasonably addressed. The AuditCommittee oversees financial risks and controls. Major risks are identified by thebusinesses and functions and these are systematically addressed through mitigating actionson continuing basis.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a Vigil Mechanism that enables the Directors and Employeesto report genuine concerns. The Vigil Mechanism provides for -
A. adequate safeguards against victimization of persons who use the Vigil Mechanism;and
B. direct access to the Chairperson of the Audit Committee of the Board of Directors ofthe Company in appropriate or exceptional cases.
Details of the Vigil Mechanism Policy are made available on the Company's websitehttp://kritiindustries.com/and have also been provided as "Annexure E" of partof this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) read with section 134(5) of the Companies Act 2013 theBoard of Directors to the best of their knowledge and ability confirm that:-
a) that in the preparation of the annual financial statements for the year ended 31stMarch 2020 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b) that the Directors have selected such accounting policies and applied themconsistently and have made judgment and
estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year ended 31st March 2020and of the statement of profit and loss of the Company for that period;
c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) that the annual financial statements have been prepared on a going concern basis;
e) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
f) that the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
INTERNAL CONTROL AND THEIR ADEQUACY
The Board of Directors of the Company is responsible for ensuring that InternalFinancial Controls have been established in the Company and that such controls areadequate and operating effectively. The Company has laid down certain guidelines andprocesses which enables implementation of appropriate internal financial controls acrossthe organization. Such internal financial controls encompass policies and proceduresadopted by the Company for ensuring orderly and efficient conduct of business includingadherence to its policies safeguarding of its assets prevention and detection of fraudsand errors the accuracy and completeness of accounting records and the timely preparationof reliable financial information.
The Statutory Auditors in their audit report have opined that these controls areoperating effectively. The Audit team develops an audit plan based on the risk profile ofthe business activities. The annual internal audit plan is approved by the AuditCommittee which also reviews compliance to the plan. The Internal Audit team monitors andevaluates the efficacy and adequacy of internal control systems in the Company itscompliance with operating systems accounting procedures and policies at all locations ofthe Company. Based on the report of internal audit function process owners undertakecorrective action(s) in their respective area(s) and thereby strengthen the controls.Significant audit observations and corrective action(s) thereon are presented to the AuditCommittee.
The Audit Committee reviews the reports submitted by the Internal Auditors.
The Board has implemented systems to ensure compliance of all applicable laws. Thesesystems were effective and operative. At every quarterly interval the Managing Directorand the Company Secretary place before the Board a certificate certifying compliance oflaws and regulations as applicable to the business and operations of the Company afterobtaining confirmation from all business unit and functional heads responsible forcompliance of such applicable laws and regulations.
During the Financial Year no frauds were reported by auditors in terms of section143(12) of the Companies Act 2013.
EXTRACTS OF ANNUAL RETURN
The particulars forming part of the extract of the Annual Return in Form MGT-9 isannexed to this report as "Annexure F" and the copy of the Annual return of theCompany is placed on the company's website- http://kritiindustries.com/ .
AUDITORS & THEIR REPORT
The shareholders at their 25th Annual General Meeting (AGM) held on 24th September2015 had approved the appointment of M/s. Rakesh Kumar & Associates CharteredAccountants (FRN: 002150C) Indore as Statutory Auditors to hold office for the period of5 years from the conclusion of 25th AGM till the conclusion of 30th Annual GeneralMeeting therefore there first term of 5 years will be completed on conclusion of theensuing AGM of the Company. The Board on the recommendation of the Audit Committeerecommended for the approval of the Members the reappointment of M/.s Rakesh Kumar &Associates as the Statutory Auditors of the Company for a further period of five years(Second Term) being the auditors firm having more than 2 partners and having givencertificate of eligibility and having valid peer review certificate as issued by the ICAIfrom the conclusion of the ensuing 30th AGM till the conclusion of the 35th AGM. YourBoard recommended for the approval of the Members for the re-appointment and authority tothe Board and Audit Committee to fix the remuneration of M/s Rakesh Kumar &Associates.
The Auditors Report and the Notes on financial statement for the year 2019-20 referredto in the Auditor's Report are self-explanatory and does not contain any qualificationreservation or adverse remark therefore do not call for any further comments.
Your company is maintaining the cost records as specified by the Central Governmentunder section 148(1) of the Companies Act 2013 is required to be maintained by theCompany and accordingly such accounts and records are made and maintained. In pursuance ofSection 148 of the Companies Act 2013 your Directors appointed Mr. S.P.S.Dangi CostAccountant (FRN 100004) Indore to conduct the Audit of the Cost Accounting records forthe financial year 2019- 20.The Company is in process to file the Cost Audit Report forthe year 2019-20 to the Central Government. The Cost Audit Report does not contain anyqualification reservation or adverse remark which needs further clarification by themanagement of the Company.
The Board on the recommendation of the Audit Committee at its meeting held on29thJune 2020 has re-appointed Mr. S.P.S.Dangi as the Cost Auditors to conduct the Auditof the Cost Accounting records for the financial year 2020-21. As required under section148(3) of the Companies Act 2013 read with Rule 14 of the Companies (Audit and Auditors)Rules 2014 the remuneration payable to the Cost Auditors is to be ratified by theshareholders.
Therefore the Board of Directors recommend the remuneration payable to Mr.S.P.S.Dangi Cost Auditors for the financial year 2020-21 for the ratification by theMembers in the ensuing Annual General Meeting.
Pursuant to the provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board appointedM/s. Kaushal Agrawal & Co. Company Secretaries Indore to conduct Secretarial Auditfor the financial year 2019-20. The Board of Directors of the Company on therecommendation of the Audit Committee at its meeting held on 29th June 2020 hasappointed M/s. Kaushal Agrawal & Co. Company Secretaries to conduct Secretarial Auditfor the financial year 2020-21.
The Secretarial Audit Report for the financial year ended 31st March 2020 in Form MR-3is attached as "Annexure G" and forms part of this Report. The observations madeby the secretarial auditor in their report are self explanatory hence no furtherexplanation is required.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company's operations in future.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of the Companies Act 2013 read with the IEPF Authority(Accounting Audit Transfer and Refund) Rules 2016 ("the Rules") notified bythe Ministry of Corporate Affairs the unclaimed and unpaid dividends amount for the year2012-13 is required to be transferred to IEPF in the due date as specified in the Noticeof the AGM and shares of the respective shares on which no dividend is claimed for aconsecutive 7 (Seven) years will also be transferred to IEPF Authority as per therequirement of the IEPF rules on due date. The details related to dividend remainsunpaid-unclaimed in the Company has been given in the Corporate Governance Report attachedwith the annual report of the Company. The details of the nodal officer appointed by thecompany under the provisions of IEPF is available on the Company's website athttp://kritiindustries.com/
An amount of H249593/- in respect of unpaid/unclaimed dividend declared for the FY2011-2012 was transferred to the Investor Education and Protection Fund Authority as wellas 136239 equity shares of face value of H1 each in respect of unpaid/unclaimeddividend declared in FY 2011-2012 was also transferred and credited to the IEPF Authorityby the Company during the year ended 31st March 2020.
The investors may claim their unpaid dividend and the shares from the IEPF Authority byapplying in the Form IEPF-5 and complying with the requirements as prescribed.
SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION PROHIBITION & REDRESSAL)ACT 2013
The company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. Internal Complaints Committee (ICC) has been set upto redress complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this policy. There is no complaintsreceived during the year:
PROVISION OF VOTING BY ELECTRONIC MEANS THROUGH REMOTE EVOTING AND EVOTING AT THE AGM:
Your Company is providing E-voting facility as required under section 108 of theCompanies Act 2013 read with Rule 20 of the Companies (Management and Administration)Amendment Rules 2015. The ensuing AGM will be conducted through Video Conferencing/ OVAMand no physical meeting will be held and your company has make necessary arrangements withCDSL to provide facility for remote e-voting and e-voting at AGM. The details regardinge-voting facility is being given with the notice of the Meeting.
Your Directors state that during the year under review:
a) The Company has not issued shares (including sweat equity shares) to employees ofthe Company under any scheme.
b) Neither the Managing Director nor the Whole-time Directors receive any remunerationor commission from its subsidiary.
: c) The Company has complied with the applicable Secretarial
Standards under the Companies Act 2013.
d) There have been no material changes and commitments
affecting the financial position of the Company which have occurred between financialyear ended on 31st March 2020 to which the financial statements relate and the date ofthis . report.
Your Directors place on record their sincere appreciation and gratitude for all theco-operation extended by Government Agencies Bankers Financial Institutions BusinessAssociates and investors and all other stakeholders. The Directors also record theirappreciation for the dedicated services rendered by all the Executive Staff and Workersof the Company at all levels in all units and for their
valuable contribution in the working and growth of the Company.
| ||For and on behalf of the Board of Directors |
| ||Shiv Singh Mehta |
|Date: 29thJune 2020 ||Chairman & Managing Director |
|Place: Indore ||(DIN: 00023523) |