Kumaka Industries Limited.
Your Directors are pleased to present the 43rd Annual report on the business andoperations of the Company and the Audited financial accounts for the Year ended 31stMarch 2017.
1. Highlights of performance :
Following figures summarize the financial performance of the Company for the year2016-2017 Financial Results:
| || ||(Rs. in Lacs) |
| ||31.03.2017 ||31.03.2016 |
|Gross total Income ||76.96 ||44.98 |
|Profit / (Loss) before Finance Cost ||(31.32) ||(52.30) |
|Depreciation and Taxes || || |
|Less: Finance Cost ||0.25 ||0.12 |
|Less: Depreciation ||13.94 ||14.13 |
|Less: Tax ||- ||0.04 |
|Less: Extraordinary/Exceptional Items ||- ||- |
|Profit /(Loss) after Tax ||(45.51) ||(66.59) |
|Net profit / (Loss) carried to Balance Sheet ||(45.51) ||(66.59) |
In view of carried forward loss the Board regrets its inability to recommend paymentof Dividend for the year under review
3. APPROPRIATION OF RESERVES
The Company has not proposed to transfer any portion of profit to the General Reserve /Capital Redemption Reserve or any other reserve for this year in view of losses.
4. SHARE CAPITAL
The paid up Equity Share Capital as on 31st March 2017 was Rs. 12.085 Crores. Duringthe year under review the Company has not issued any shares. The Company has not issuedshares with differential voting rights. It has neither issued employee stock options norsweat equity shares and does not have any scheme to fund its employees to purchase theshares of the Company.
5. COMPANY'S PERFORMANCE / STATE OF COMPANY'S AFFAIRS
The Company earned Gross Total Income of Rs.76.96 Lacs for the year under review asagainst Rs.44.98 Lacs for the financial year 2015-16. After providing finance costdepreciation and tax Net Loss of the Company is Rs. 45.51 Lacs compared with Loss of Rs66.59 of the previous year.
Due to the current global slowdown and cheap imports from China the company had to shutdown its pharmaceutical plant.
The company is now looking for new opportunities in the manufacturing sector.
6. Subsidiary Companies
The Company has no subsidiary company as on March 31 2017. There are no associatecompanies within the meaning of Section 2(6) of the Companies Act 2013 ("Act").
7. Directors' Responsibility Statement
a) That in the preparation of the annual financial statements for the year ended March31 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b) That such accounting policies as mentioned in Notes to the Financial Statements havebeen selected and applied consistently and judgement and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at March 31 2017 and of the Loss of the Company for the year ended on thatdate;
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 systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
The Company has no overdue unpaid / unclaimed deposit. The Company does not have anydeposit from Directors or any other Shareholder or Member as at 31st March 2017.
9. Details of Directors or KMP who were appointed or have resigned during theyear:
Mr. Soaib G Sheikh resigned from the post of Company Secretary w.e.f. 17/01/2017.
Dr. Indula panchal was appointed as Additional Director w.e.f 15/06/2016 andregularised at AGM held on 20/09/2016.
Mr. Shailesh Modi resigned as director w.e.f 21/05/2016.
Events occurring after Balance Sheet Date - Change in Directors/KMP.
Mr. Bharat Parikh resigned from the post of Chief Financial Officer w.e.f.30/05/2017 after office hours.
Mr. SHIV PATEL has been appointed as CHIEF FINANCIAL OFFICER of the Company W.e.f.31/05/2017.
Ms. Ankita Gupta has been appointed as Company Secretary of the Company W.e.f12/07/2017.
10. Board Meetings held during the year.
Six Meetings of Board of Director were held during the year 25-04-2016 21-05-2016& adjourned to and on 30/05/2016 27-07-2016 09-11-2016 and 13-02-2017. For detailsof meetings of the Board please refer to the Corporate Governance Report which forms partof the Directors' Report.
11. Board Evaluation
The Board of Directors has carried out an annual evaluation of its own performanceBoard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by Securities and Exchange Board of India("SEBI") under Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015.
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc.
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof his role.
In a separate meeting of independent Directors performance of non-independentdirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent Directors at which the performance of the Board its committees andindividual directors was also discussed.
12. Policy on Directors' Appointment and Remuneration and other details
The Company's policy on Directors' Appointment and Remuneration and other mattersprovided in Section 178(3) of the Act has been stated in the Corporate Governance Reportwhich forms part of the Directors' Report.
13. Internal Financial Control Systems and their Adequacy
The details in respect of internal financial control and their adequacy are included inthe Management Discussion & Analysis which forms part of this report.
14. Human Resources
Company's industrial relations continued to be harmonious and cordial during the yearunder review.
(1) Statutory Auditors:
"M/s. M.B.Majmudar has tendered their resignation w.e.f 04/08/2017 to discontinueas the Statutory Auditor of the Company for the financial year 2017-18 and furtherremaining terms of their period.
Hence in order to fill up the casual vacancy the Company has appointed M/s. PrakkashMuni & Associates (Chartered Accountant) in the Board Meeting held on August 05 2017.
(2) Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyappointed Chirag Brahmbhatt a firm of Company Secretaries in Practice to undertake theSecretarial Audit of the Company for the year ended March 31 2017. The Secretarial AuditReport is annexed as Annexure - 1.
The Secretarial Audit Report for the financial year ended March 31 2017 containsobservations. Directors reply on the Auditors comment is as follow:
Explanation for observations:-
1. For Point no. 1 to 3: As it is mentioned in the Observations 1 to 3 the Company hasthe Company has submitted petition No. CSP/190/2017 to the NCLT under Section 230 to 232of Companies Act 2013 The Company is awaiting order of NCLT
2. For Point no. 4: Due to financial constraints Company had not released theadvertisement in the newspaper. The Company will release the advertisement in future.
16. Management Discussion & Analysis
The company's pharmaceutical plant had to be shut down due to the global slowdowncheap imports from china and unavailability of funds from the banks. Due to the company'spast financial history the banks are not willing to fund the company. Hence the companycould not avail any working capital or term loan for their projects. In view of this thecompany had to shut down its pharmaceutical plant and is currently looking for newopportunities in the manufacturing sector.
OpportunitiesThreats Risk and Concerns
Currently the Company has shut down its pharmaceutical plant and is looking for newbusiness opportunities.
Segment wise performance
The Company's pharmaceutical plant has been shut down. There is no other segment ofCompany's operation.
A summary of the financial performance is disclosed in Director's Report.
Internal Control Systems and Adequacy
The Company has adequate internal control systems including suitable monitoringprocedures commensurate with its size and the nature of the business. The internal controlsystems provide for all documented policies guidelines authorisation and approvalprocedures. The statutory auditors while conducting the statutory audit review andevaluate the internal controls and their observations are discussed with the Auditcommittee of the Board.
Statements in the Management Discussion and Analysis describing the Company'sobjectives projections estimates expectations may be 'forward looking statements'within the meaning of applicable securities laws and regulations. Actual results coulddiffer materially from those expressed or implied. Important factors that could make adifference to the Company's operations include financial position of the company economicconditions affecting demand / supply price conditions in the domestic and overseas marketin which the company operates changes in the government regulations tax laws and otherstatutes.
17. Audit Committee & Nomination and Remuneration Committee:
The details pertaining to composition of audit committee & Nomination andRemuneration Committee are included in the Corporate Governance Report which forms partof this report.
18. Risk Management:
The Board of the Company has formed a Risk Management Committee to frame committee isresponsible for reviewing implement and monitor the risk management plan for the Company.The the risk management plan and ensuring its effectiveness.
Details of the internal controls system are given in the Management Discussion andAnalysis Report which forms part of the Directors' Report.
19. Particulars of Loans Guarantees or Investments.
The Company has not provided any loans and not given any guarantees nor providedsecurities to any of the entities or made investments pursuant to Section 186 of theCompanies Act 2013:
20. Particulars of Contracts or Arrangements with Related Parties.
Particulars of contract or arrangement with related parties as referred in sec 188 (1)of Companies Act 2013 in prescribed form AOC-2 is appended as Annexure - 2 to BoardReport.
21. CSR Policy
The Company is aware of its responsibility for impact of its actions on allstakeholders including society and community at large. Management's commitment workethics and business processes at the Company encourage all its employees and otherParticipants to ensure a positive impact and its commitment towards corporate socialresponsibility. The Company is aware of the environmental impact of its operations and itcontinually strives to reduce such impact. The Company intends to initiate to supportsocial and community welfare activities touching the lives of people around the projectlocations and ensuring the highest standards of safety and environment protection in ouroperations in coming future.
In terms of Section 135 of Companies Act 2013 the Company has constituted CorporateSocial Responsibility (CSR) Committee with Dr. Niranjan Pandya Dr. Dhanjay Panchal andMr. Pankaj Kadakia.
The Company has not taken any initiative on CSR in current reporting period.
22. Policy on Prevention Prohibition and Redressal of Sexual Harassment at workplace.
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under. The Policy aims to provideprotection to employees at the workplace and prevent and redress complaints of sexualharassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure. The Company has alsoconstituted an Internal Complaints Committee headed by Women Director known as thePrevention of Sexual Harassment (POSH) Committee to inquire into complaints of sexualharassment and recommend appropriate action.
The Company has not received any complaint of sexual harassment during the financialyear 2016-17.
23. Vigil Mechanism/ Whistle Blower Policy
The Company has adopted a Vigil Mechanism /Whistle Blower Policy to provide a formalmechanism to the Directors and employees to report their concerns about unethicalbehavior actual or suspected fraud or violation of the Company's Code of Conduct orethics policy. The Policy provides for adequate safeguards against victimization ofemployees who avail of the mechanism and also provides for direct access to the Chairmanof the Audit Committee. It is affirmed that no personnel of the Company has been deniedaccess to the Audit Committee.
24. Significant and Material Order passed by the Regulators or Courts:
No significant material orders have been passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company.
25. Particulars of Employees and Remuneration:
Pursuant to the Rule 5(2) & (3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules no employee of the Company was paid remuneration exceedingthe prescribed limits during the Financial year 2016-17.
26. Extract of Annual Return as per Section 92 (3) of Companies Act 2013:
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as "Annexure -3".
27. A Statement on Declaration given by Independent Directors under Sub-Section (6) ofSection 149:
In accordance with requirements of Section 149(6) and (7) of the Companies Act 2013and Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 all the independent directors have given declarations ofindependence in the first board meeting of the current financial year.
28. Material changes and commitments affecting financial position between the end ofthe financial year and Balance Sheet date:
There are no material changes and commitments that would affect financial position ofthe company from the end of the financial year of the company to which the financialstatements relate and the date of the directors report.
29. Energy Conservation Technology Absorption and Foreign Exchange Earnings andOutgo:
A) Conservation of Energy:
Your Company is serious in conserving energy by reducing consumption of power byimplementing close monitoring over plan running and adequate maintenance of electriccomponents of plants and other machinery. The Company has not made any capital investment.However the Company has continued same actions.
B) Technology absorption:
Your Company has not taken new initiative towards technology for absorption and henceit neither imported any technology nor made any expenditure on research and development.
C) Foreign Exchange earnings and outgo:
There is no inflow or out flow of Foreign exchange during the year.
D) The change in nature of business:
There is no change in nature business of the company during the year under review.
Your Directors would like to express their sincere appreciation for the assistance andco-operation received from all the stakeholders during the year under review. YourDirectors also wish to place on record their deep sense of appreciation for the committedservices by the Company's executives staff and workers.
| ||For and on behalf of the Board of Directors |
|Date: 05th August 2017 ||Pankaj M. Kadakia |
|Place : Vadodara ||Chairman & Managing Director |
| ||(DIN-00166339) |