Your Directors present the 30th Annual Report together with the audited accounts ofyour company for the year ended 31st March 2020.
1. FINANCIAL RESULTS
During the year under review the company achieved an aggregate income of Rs.2914.46Lakhs. The highlights of the financial results are as under:
| || |
Amount in (Rupees in '000) .
| ||Current Year ||Previous Year |
| ||2019-2020 ||2018-2019 |
|Sales ||285185.23 ||361756.51 |
|Other Income ||6261.31 ||3899.25 |
|Gross Total Income ||291446.54 ||365655.76 |
|Profit before Interest Depreciation & Tax ||36760.36 ||40015.18 |
|Interest ||16687.96 ||14983.51 |
|Depreciation ||17244.03 ||15921.42 |
|Profit before Exceptional Items & Extraordinary items and Tax ||2828.37 ||9110.25 |
|Exceptional Items ||- ||- |
|Profit before Tax and after Exceptional || || |
|Items & Extraordinary Items ||2828.37 ||9110.25 |
|Provision for Taxation ||(4040.18) ||(200.17) |
|Profit after Tax ||6868.55 ||9310.42 |
|Other Comprehensive Income net of tax ||(536.38) ||54.63 |
|Total Comprehensive Income ||6332.17 ||9365.05 |
|Balance in P&L A/c brought Forward ||81685.42 ||69160.48 |
|Balance Available for Appropriation ||88553.97 ||81685.42 |
|Proposed Dividend ||0.00 ||0.00 |
|Tax on Proposed Dividend ||0.00 ||0.00 |
|Transfer to General Reserve ||0.00 ||0.00 |
|Balance carried to Balance Sheet ||88553.97 ||81685.42 |
Consolidated Financial Statement :-
As required under SEBI (Listing Obligation & Discolsure Requirements) Regulations2015 (SEBI Listing Regulations) and in accordance with the Indian Accounting Standard (IndAs) 110 Consolidated Financial Statement (CFS) of the Company Form part of the AnnualReport and are reflected in CFS of the Company. These statements have been prepeared onthe basis of audited Financial Statement received from the subsidiary and as approved bytheir respective Boards.
2. OVERVIEW AND REVIEW OF OPERATION
A review on division wise performance of the company is furnished below:-
The total income of the Tyre division for the year 2019-20 amounted to Rs.1064.28 lakhscompared to Rs.1076.80 lakhs of in the previous year. The loss before tax amounted to Rs.(15.05) lakhs as compared to profit of Rs. 2.06 lakhs previous year.
During the year this unit has maintained its top line but there was bottom line hasslipped into red due to adverse foreign exchange scenario and further increase in wagesand other overhead which we could not pass further to our customers due to very difficultand competitive business environment. We are very hopeful to be back in positive territoryin this year.
The unit is engaged in manufacturing MCP Tubeless Tires & Hospital Equipments fordomestic market. The unit reported an income for the year 2019-20 amounted to Rs. 1861.03lakhs as compared to the previous year Rs. 1687.23 Lakhs and the unit reported the Profitbefore tax for the year 2019-20 of Rs. 187.52 lakhs compared with previous year of Rs.60.31 lakhs.
This unit has increased its profit margin from last year. Also we have increased ourtopline impressively. We further believe that we can grow higher than industry average. Weare very confident for coming years as there are certain bicycle companies & othermobility companies which are showing interest in our product as we can offer our uniqueproduct with no competitors in India. All this development is in very nascent stage. Wehope to see very positive outcome in coming years.
The total income of this unit for the year 2019-20 amounted to Rs.77.56 lakhs comparedto Rs.119.43 lakhs in the previous year. The unit reported the profit before tax for theyear 2019-20 amounted to Rs. (86.68) lakhs compared to Rs. (76.16) lakhs in the previousyear.
Due to stagnant export demand its productivity has not been achieved as per itscapacity. With export as well as demand for other units will pick up we believe to use itscapacity at higher level. This is a captive unit which is linked with the sales of otherunits.
The total income of this unit for the year 2019-20 amounted to Rs. 262.13 lakhscompared to Rs. 332.15 lakhs.The unit reported the profit before tax for the year 2019-20amounted to Rs. 60.16 lakhs compared to the profit of Rs. 75.94 lakhs.
The unit has maintained the status quo in its performance. It can do much better and weare de bottle necking some process which will help in output with better costs. We believethat it can be used at full capacity from current financial year onwards with betterrealizations.
The total income of the footwear division for the year 2019-20 amounted to Rs. 332.83lakhs compared to Rs. 695.84 lakhs in the previous year. The unit reported loss before taxof Rs. (52.75) lakhs during the year compared to profit of Rs. 22.02 lakhs in the previousyear.
Due to slowdown in Indian economy footwear industry has suffered and it has resulted inlosses in last 6 months of the year. This year job work has decreased due to subdueddemand across India. Our Sole business was flat from last year. Our trail run for safetyshoes has already been completed and we are in process of obtaining BIS certification in2020-21 we are very confident that it will increase out topline as well as bottom line incoming years after all necessary procedures.
The total income of this unit for the year 2019-20 amounted to Rs. 748.81 lakhscompared to Rs.1126.41 lakhs in the previous year.
The unit posted the loss before tax for the year 2019-20 amounted to Rs. (64.91) lakhscompared to profit of Rs. 6.93 lakhs.
Current year was very challenging due to very stiff competition from imports. We havemade losses due to increase in raw material prices abruptly and we could not pass on theincreased prices to customers due to cheaper imports.We are very hopeful to deliver growthof 10-15% CAGR for next 3 years. As per current government policies they are pushing hardin this segment with focus on "Divyang" for sustained living.
The Indian Rehab Care Equipment Market has accepted the Brand "i Care"which was very encouraging for our company but we need to push on sale further tostrengthen our brand value.
Company has always taken a long term view of this business and the company is also inprocess to come with more similar products for the disabled persons in the coming year.And the company is also expecting very high demand due to weaker rupee and stronger USD& Chinese Yuan due to which we will be very competitive not only in India but allaround the world.
In order to strengthen the financial position of the company the Board of Directorshave decided not to recommend any dividend for the Financial Year ended 31st March 2020and plough back the profits of the company in its business.
3. SUBSIDIARIES JOINT VENTURES OR ASSOCIATES
During the year your Company incorporated a Subsidiary with 90% holding in the nameand style of Krypton Europe S.R.O. a limited liability Company in the Nadrazni 48 51401 Jilemnice Czech Republic during the year. The purpose of setting up this entity isto establish a marketing and distribution network to explore markets in Europe for RehabCare products.
In accordance with Section 129(3) of the Companies Act 2013 the consolidatedfinancial statements of the company has been prepared which forms part of this AnnualReport. Further the report on the performance and financial position of the subsidiary inthe prescribed formAOC-1 is annexed as Annexure IV to this report.
4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report as required Listing agreement with StockExchange:-
A. Industry Structure & Developments:-
Krypton Industries Limited (KIL) had another positive year in this difficult marketconditions and increasing input cost and manufacturing expenses.
Company's primary focus is expansion in Indian Markets for all its product line whichinclude PU Safety Footwear MCP tubeless tires and hospital/disabled support equipmentbusiness.. Company is also focusing on high end products like hospital beds/ powerwheelchairs for disabled persons and to increase its product portfolio. Also company isaggressively betting for government tenders for Wheelchairs & other support equipment.
We are currently focusing of Rehab care business which has tremendous growth outlook asthis industry is in very nascent stage in India. Also our government are pushing very hardto improve the health care infrastructure in India which we can contribute in verypositive way.
B. Outlook and opportunities
Your Company has identified the following opportunities and future building businessareas:
The company's major focus is on MCP tubeless tires in bicycle industry and rehab carebusiness which has very promising in future. Primarily the PU tire for Bicycle rehabcare products and tires for industrial application will be our main focus this year andyears to come for the domestic as well as international market.
With Rehab care / disabled support equipment business the company is now considered asone of major domestic brand in India with brand name " ICARE " for rehabcare products & we have also launched affordable new model of wheelchair in the BrandName " UDAAN " which was accepted in highly competitive market with ourcurrent product portfolio & brand recognition in market the future looks verypromising. With government focus on "Divyang" section of society hugedemand from both government sector as well as from market will come in future. We havebeen also accredited with certain quality certification which will help company toparticipate tenders from Defense NGO's Hospitals & other government organizations.Company is also continuously making efforts to increase its product portfolio to staycompetitive from imports and other emerging players in the segments.
C. Outlook on threats risk and concern
1. Business Risks:
Company's main product portfolio is MCP tubeless Tires & castor wheels forindustrial applications. It faces major competition from rubber tires which is cheaperthan our products in same industry. Also rubber prices are much stable than polyurethane.Also our bicycle tire is new entrant in our portfolio which is still in growing stage andhas a huge potential but at the same time it's a completely new product for the market andacceptance will take some time to establish. Our positive side is that life & qualityof our product is much more superior than rubber tires.
In rehab care / Hospital furniture business our company is facing biggest competitionfrom cheap & low quality Chinese products. Also further increase in prices in steel& other raw material items will hurt our bottom line in future. Also passing onadditional cost is very difficult in this industry.
Company normally import Raw Materials and export finished goods during its course ofbusiness which exposes it to exchange fluctuation risks and international crude &petrochemicals prices affects the raw material prices.
Also due to COVID-19 whole business scenario has changed and demand will take another2-3 quarters to stabilize. We are also impacted in this scenario but we are searching allother options to minimize this impact.
2. Financial Risks:
Majority of raw material are imported so any major fluctuation in US$ can affect theperformance of the company. Company is trying to leverage this risk by sourcing more fromlocal vendors. Although foreign exchange risks somewhat balanced by exports and company isregularly covering such risk.
The interest cost is still on the higher side although RBI started reducing interestrates and banks are reluctant in passing the benefit to borrowers. Company is exploringthe other means to reduce interest cost.
3. Legal & Statutory Risks
Company is complying regularly with all the regulatory requirements with respect tomanufacturing taxations statutory requirements company law SEBI etc with new lawscoming in this exercise will need more inputs which company is working towards.
Also if any adverse impact on customs duty hike due to ongoing spat with china it mayincrease the overall cost of raw materials.
4. Political Risks
Any major change in local national or international can affect the business but as atthe moment company does not have any business with government entities the risk isminimal. Although company is trying to secure government business at the moment this canimpact positively as well as negatively in a small percentage of growth of the company.
D. Internal Control System and their adequacy:
Your Company believes that Internal Control is a required principle of governance thatfreedom of management should be exercised within a framework of appropriate checks andbalances. Your Company remains committed to ensuring an effective internal controlenvironment that provides assurance on the efficiency of operations and security ofassets.
The company has an Audit Committee the details of which have been provided in theCorporate Governance Report. Internal auditor performs their duty and audit committeereviews internal auditor reports and other reports and provides suggestions forimprovement /takes corrective actions. The committee also meets the Company's StatutoryAuditors to ascertain interalia their views on the Adequacy of Internal Control Systemsin the company and keeps Board of Directors informed from time to time.
E. Financial Performance
Over all financial Performance of the company is satisfactory in current marketscenario we are cautiously improving in costing point of view which will further add toout margins. Our company will surely improve out topline and bottom line this year and inthe years to come.
F. Human Resource Developments:
During the fiscal 2019-2020 company has more than 230 Persons on its payroll. Apartfrom this company has generated indirect employment to more than 750 persons in nearbylocations. Company is working on to restructure the total organization to help its growthwith further recruitment in the top and middle management level at different positions.
5. SHARE CAPITAL
The paid up equity share capital as at March 31 2020 is Rs. 14.69 Crores divided into14697130 equity shares of face value Rs. 10 each.
During the year under review the Company has not issued any equity shares withdifferential rights or sweat equity shares or under any employee stock option.
During the year under review the Company has neither invited nor accepted any fixeddeposits from the public within the meaning of section 73 of the Companies Act 2013 andthe rules made there under.
7. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The particulars of the loans given Investments made Guarantees or Securities providedduring the year have been disclosed under the Note no. 561341 to the financialstatement.
8. PARTICULARS OF THE CONTRACTS OR ARRANGEMENTS WITH THE RELATED PARTIES
All transactions/ contracts/arrangements entered with the Related Parties during thefinancial year were in the Ordinary course of business and on arm's length basis andwithout any conflict of interest. Moreover the company has not entered into anytransaction of material nature with the promoters directors management subsidiaries orany significant related party during the financial year that may have potential conflictwith the interests of the company at large.
Since all the related party transactions entered into by the Company were in theordinary course of the Business and on an arm's length basis. Thus no transaction arebeing reported in Form No. AOC-2.
The details of the transactions/ contracts /arrangements held with the related partieshave been disclosed in the Notes to the financial statements. A framed Policy on RelatedParty Transactions duly adopted by the Board is available on the Company's websitewww.kryptongroup.com.
9. MATERIAL CHANGES AND COMMITMENTS
There has been no material changes have been occurred affecting the financial positionof the company in between the period from the close of the financial year of the companyto which the Balance Sheet relates and the date of the report.
Statutory Auditors & their Report
M/s P. K. Luharuka & Co. (Registration no. 322020E) Auditors of the Company havebeen appointed at the Annual General Meeting on September 22 2017 for a term of 5 years.The Company has received consent of the Auditors for continuation of office for thecurrent year.
The observations made by the Statutory Auditors in their report for the financial yearended 31st March 2020 read with the explanatory notes therein are self-explanatory andtherefore do not call for any further explanation or comments from the Board underSection 134(3) of the Companies Act 2013. The Auditors' Report does not contain anyqualification reservation or adverse remark.
Secretarial Audit Report
Pursuant to section 204 of the Companies Act 2013 the Board has appointed MeenakshiAgarwal Practicing Company Secretary to undertake the audit of Secretarial and otherrelated records of the company. The Secretarial Audit Report issued by Meenakshi Agarwalin Form MR-3 for the financial year ended 31st March 2020 is also annexed herewith inAnnexure-VI. Your directors wish to clarify the observations made by the Auditorsregarding the cases being shown as pending in the
Bankshall Courts which were actually being resolved during the past years itself andfor which a letter is being sent to the Registrar for removal of such cases from thepending list.
Your Directors also clarify that the listing fees of the Calcutta Stock Exchange forthe financial year is not being paid as the said stock exchanges is suspended from longand expected that the exchange will get de-recognised soon.
Cost Audit & Records
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 the Company is only required to maintain its costrecords in respect of the products being manufactured by the company. The Cost records areduly maintained by the company as required.
11. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGES EARNINGS
AND OUT GO:
The information as required under clause (m) sub section (3) of section 134 of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rule 2014 is annexedherewith in Annexure- I.
12. EXTRACT OF ANNUAL RETURN
The extract of Annual Return in Form MGT-9 forming part of the Directors Report is dulyattached herewith in Annexure-II.
13. DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR
TRIBUNAL IMPACTING GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There were no significant & material orders passed by the regulators or courts ortribunal which would impact the going concern status and future operations of the company.
14. LISTINGAT STOCK EXCHANGES
The equity shares of the company are listed on the stock exchanges at Kolkata andMumbai. The annual Listing fees have been paid for the financial year 2019-2020.
15. CORPORATE GOVERNANCE
A separate section on corporate governance together with a certificate from theAuditors of the company regarding full compliance with the provisions of SEBI (ListingObligations and Disclosure Requirement) Regulations 2015 with the stock exchanges forms apart of the Report under Annexure- V.
During the year under review nine Board Meetings and four Audit Committee Meetingswere convened and held the dates and attendance in by each Directors are given in theCorporate Governance Report. The maximum time gaps between the Meetings were within theperiod as prescribed under the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirement) Regulations 2015.
The details of constitution of the Board and its Committee are given in the CorporateGovernance Report.
17. SECRETARIAL STANDARDS
The Company has complied with Secretarial standards issued by the Institute of CompanySecretaries of India.
Mrs. Vimala Devi Bardia (DIN: 07125170) Non-Executive Director who is liable to retireby rotation as director in accordance with the Companies Act 2013 and being eligibleoffers herself for reappointment at the forthcoming Annual General Meeting.
Mr. Ravi Prakash Pincha (DIN: 00094695) was appointed as an Independent Director at the25th annual General Meeting (AGM) of the Company held on 24th September 2015 for a periodof five years. Based on the recommendations of the Nomination and Remuneration Committeeand Board his re-appointment for a second term of five years is proposed at the ensuingAGM for approval of the members by way of special resolution.
None of the Directors of the company are disqualified for being appointed as Directorsas specified under section 164 of the Companies Act 2013 and the rules made thereunder.
DECLARATION BY INDEPENDENT DIRECTOR: The Company has duly received the declarationfrom all the Independent Directors as laid under section 149(6) of the Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015. Thedeclaration was placed and noted by the Board at its meeting held on 31st July 2020.
19. REMUNERATION POLICY
The Board on recommendation of the Nomination & Remuneration Committee has frameda policy for selection and appointment of Directors Senior Management and theirremuneration which includes criteria for performance evaluation of non-executive andexecutive directors. A detailed Policy is also available on the website of the Companywww.kryptongroup.com.
20. RISK MANAGEMENT POLICY
In accordance with the SEBI (Listing Obligations and Disclosure Requirement)Regulations 2015 the Board of Directors of the Company is responsible for framingimplementing and monitoring the Risk management plans of the Company. The Company has alsoframed a Risk Management Policy defining the roles and responsibilities of the Committeeand the same has been approved by the Board of Directors of the Company.
The Risk Management Policy is available on the website of the companywww.kryptongroup.com.
21. VIGIL MECHANISM/WHISTLE BLOWER POLICY
In accordance with the provision of the Companies Act 2013 read with the Rules madetherein and SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 everylisted company shall establish a Vigil Mechanism for the directors and employees to reporttheir genuine concerns and grievances. A framed Vigil Mechanism is available on thecompany's website www.kryptongroup.com.
The Audit Committee is entrusted with the responsibility to oversee the VigilMechanism.
22. BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 and Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 theperformance evaluation of the Board as a whole Chairman and the Non-Independent Directorswas carried out by the Independent Directors. This exercise was carried out in accordancewith the Remuneration Policy framed by the Company within the framework of applicablelaws.
The Board carried out an annual evaluation of its own performance as well as theevaluation of the working of its committees and individual Directors including Chairmanof the Board. The performance evaluation of all the Directors was carried out by theNomination and Remuneration Committee. While evaluating the performance and effectivenessof the Board various aspects of the Board's functioning such as adequacy of thecomposition and quality of the Board time devoted by the Board to Company's long-termstrategic issues quality and transparency of Board discussions execution and performanceof specific duties obligations and governance were taken into consideration.
23. DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Companies Act 2013 your Directors herebystates:
3 That in the preparation of the Annual Accounts the applicable Accounting Standardshave been followed with proper explanation relating to material departures if any;
3 That the directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are responsible and prudent so as togive true and fair view of the state of affairs of the company at the end of the financialyear and of the profit of your company for that period.
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 your company and for preventing and detecting fraud andother irregularities.; and
3 That the directors have prepared the annual accounts on a going concern basis and
3 That proper internal financial controls were in place and that the financial controlswere adequate and were operating effectively and
3 That the systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.
24. PARTICULARS OF EMPLOYEES
The disclosure required under section 197 of the Companies Act 2013 read with the Rule5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014 isannexed herewith in Annexure- III.
Your Directors state that during the year under review there were no cases filedpursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
25. ISO 9001-2008 IS 7454
Your company operates in ISO 9000 quality assurance system as per the ISO 9001-2008standards. The Audit was duly carried out during the year 2019-20. The new standards aremainly customer oriented and they will help our Company to get much better controls toimprove with best customer satisfaction standards.
The company has been granted the license by Bureau of Indian Standards (BIS) to useStandard Mark i.e. IS 7454 in respect of Rehabilitation equipment- Wheelchairs Folding andAdult size according to which we will manufacture highest quality of wheelchairs as perthe specification.
Your Directors take this opportunity to record their appreciation for the continued andsustained support and co-operation extended to the Company by the Government of IndiaState Governments Financial Institutions and Banks Dealers and Customers SuppliersTransporters Employees Shareholders and all other Stakeholders.
Certain statements made in the Director's Report and "Management Discussion &Analysis Report " which seek to describe the company's objectives projectionsestimates expectation or predictions etc may constitute "forward lookingstatements" within the meaning of applicable laws and regulations. Actual result maydiffer from such expectations projections etc. whether express or implied. Severalfactors could make significant difference to the Company's operations. These includeclimatic conditions and economic conditions affecting demand and supply governmentregulations and taxation natural calamities etc. which the company doesn't have anydirect control.
|Registered Office : Falta Special Economic Zone ||By Order of the Board |
|Sector-1 Plot-31&32 Falta ||For Krypton Industries Limited |
|24-Parganas (S) Pin-743504 || |
|West Bengal || |
|CIN : L25199WB1990PLC048791 || |
| ||Jay Singh Bardia |
| ||Managing Director |
|Date: 31.07.2020 ||(DIN : 00467932) |