The Members of
M K Exim India Limited
Your Directors have pleasure in presenting their 27thAnnual Report and theaudited financial statements for the financial year ended 31st March 2019
1 Standalone Financial Results
The summarized financial results for the financial year ended 31st March 2019 arepresented below:
Rs. In Lakhs
| || || |
|Details ||Financial year ended 31st March 2019 ||Financial year ended 31stMarch 2018 |
|Income from operations ||2520.78 ||1999.00 |
|Profit before interest depreciation and taxation ||124.95 ||127.49 |
|Finance cost ||39.86 ||62.54 |
|Depreciation ||24.13 ||29.20 |
|Profit before tax ||60.95 ||35.75 |
|Taxation ||25.24 ||11.16 |
|Profit after tax ||35.71 ||24.59 |
|Balance brought forward from previous year ||1000.42 ||975.83 |
|Less Dividend ||- ||- |
|Disposable surplus available after adjustments ||1036.13 ||1000.42 |
|Balance carried to balance sheet ||1036.13 ||1000.42 |
The income during the financial year ended 31st March 2019 is Rs. 2520.78 lakhscompared to Rs. 1999.00 lakhs a increase of about 26%. The increase was due to goodglobal textiles market and healthy competition in export markets. The profit after tax isRs. 35.71 lakhs for the year under report compared to Rs. 24.59 lakhs for the financialyear ended 31st March 2018. The sales by way of exports are Rs. 2366.79 lakhs during theyear ended 31st March 2019 compared to Rs. 1909.54 lakhs in the previous year. Exportsales constitute about 94% of the total revenue during the year.
2 Dividend Distribution & Transfer to reserves
With a view to conserve the resources for the business of the Company the Directors donot recommend dividend for the financial year ended 31st March 2019.
The Board of Directors has decided to retain the entire amount of profit for FinancialYear 2018-19 in the statement of profit and loss and does not proposed any amount to carryto any specific reserve
3 Share Capital
The paid up equity share capital of the Company as at 31 st March 2019 stood at Rs.718.05 lakhs. During the year under review the Company has not issued shares withdifferential voting rights nor has it granted any stock options or sweat equity. None ofthe directors of the Company hold instruments convertible into equity shares during thefinancial year ended 31st March 2019.
4 Analysis & Review
The Indian textiles industry is extremely varied with the hand-spun and hand-woventextiles sectors at one end of the spectrum while the capital intensive sophisticatedmills sector at the other end of the spectrum. The decentralised power looms/ hosiery andknitting sector form the largest component of the textiles sector. The close linkage ofthe textile industry to agriculture (for raw materials such as cotton) and the ancientculture and traditions of the country in terms of textiles make the Indian textiles sectorunique in comparison to the industries of other countries. The Indian textile industry hasthe capacity to produce a wide variety of products suitable to different market segmentsboth within India and across the world.
The domestic textile industry in India is estimated to reach US$ 223 billion by 2021.Increased penetration of organised retail favourable demographics and rising incomelevels are likely to drive demand for textiles. India is the world's second largestexporter of textiles and clothing. Textile and apparel exports from India are expected toincrease to US$ 82 billion by 2021.
The fundamental strength of the textile industry in India is its strong production baseof wide range of fibre /yarns from natural fibres like cotton jute silk and wool tosynthetic / man-made fibres like polyester viscose nylon and acrylic. India's textilesindustry contributed seven per cent of the industry output (in value terms) of India in201718. It contributed two per cent to the GDP of India and employs more than 45 millionpeople in 2017-18. The sector contributed 15 per cent to the export earnings of India in2017-18.
The new textile policy aims to achieve US$ 300 billion worth of textile exports by2024-25 and create an additional 35 million jobs. By 2022 the Indian textile sector willrequire additional 17 million workforce.
Opportunity and threats
The Government supports modernisation of the industry with a particular focus onclosing the gap in the textile value chain and has taken several measures to create thosepositive impulses. But there are still some improvements possible. The industry waits forthe proposed reform in labour law support to develop a skilled work force and programmesto bind talents to be able to translate market needs into quality products.
The Company is experiencing pressure on margins due to severe competition from otherlow-cost countries like China. There is also a threat of high inflation rate as the pricesof commodities have been increasing. Textiles being a labour intensive industry risinglabour and skilled human resources costs can put pressure on margins.
The implementation of Goods and Service Tax (GST) had mixed impact on trade &commerce during the last fiscal. The impact of GST is particularly stark in the highlyfragmented synthetic textile industry which attracts different GST rates at differentstages of production and sales. Working capital cost has gone up as the businesses have towait for tax refunds to come through. Pending tax refunds have slowed down freshinvestment and resulted into liquidity constraints.
As stated above Export sales constitute about 94% of the total revenue during theyear. Apart from fierce competition from China Korea and Indonesia the volatility ofrupee vis a vis US dollars is a major business risk as all export invoices are issued inUS Dollars. This is sought to be overcome by appropriate forward contracts.
The Indian government has come up with a number of export promotion policies for thetextiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector underthe automatic route.
As of August 2018 the Government of India has increased the basic custom duty to 20per cent from 10 per cent on 501 textile products to boost Make in India and indigenousproduction.
The Indian Government announced a special package to boost exports by USD 31 billioncreate one core job opportunities and attract investments worth USD 11.93 billion during2018-2020.
The cabinet committee on Economic Affairs (CCEA) Government of India has approved anew skill development scheme named "Scheme for capacity building in Textiles Sector(SCBTS)" with an outlay of Rs. 1300 Crore (USD 202.90 Million) from 2017-18 to201920.
The Directorate General of Foreign Trade (DGFT) has revised rates for incentives underthe Merchandise Exports from India Scheme (MEIS) for two subsectors of Textiles Industry -Readymade garments and Made ups - from 2 per cent to 4 per cent.
5 Performance highlights
(a) Share Capital
The Authorised Share Capital of the Company is 100000000/- comprising of 10000000equity shares of Rs. 10/- each. The paid-up capital of the Company is Rs. 71805000/-.
(b) Loan funds
During the year the Secured Loan of the Company was decreased by 20.18% i.e. from Rs.462.62 Lakhs to Rs. 369.28 Lakhs the interest cost reduced during the year.
During the year the turnover of the Company has increased by 24% i.e. from Rs. 1909.55Lakhs to Rs. 2366.79 Lakhs the board is making their possible efforts to improve theperformance of the company during the current financial year.
6 Finance& Accounts
The Company prepares its financial statements in accordance with the requirements ofthe Companies Act 2013(hereinafter referred as "the Act" or "Act") andthe Generally Accepted Accounting Principles (GAPP) as applicable in India. The financialstatements have been prepared on historical cost basis in conformity with the IndianAccounting Standards ("Ind AS"). The estimates and judgments relating to thefinancial statements are made on a prudent basis so as to reflect in a true and fairmanner the form and substanceof transactions and reasonably present the Company's stateof affairs profits and cash flows for the financial year ended 31st March 2019.
7 Corporate Social Responsibilities
Section 135 of the Act and the rules made there under relating to corporate socialresponsibility are not applicable to the Company during the financial year ended 31stMarch 2019.
Kolba Farm Fab Private Limited is the subsidiary of the Company. The sales of thesubsidiary Company were Rs. 357.11 Lakhs during the financial year ended 31st March 2019compared to Rs. 288.61 Lakhs in the previous year. The net profit after tax was Rs. 13.88Lakhs during the year under report compared to Rs. 15.34 Lakhs in the previous year.
The salient features of the financial statement of the subsidiary are given in form AOC1.
9 Consolidated Financial Statement
The consolidated financial statements of the Company are prepared in accordance withthe relevant accounting standards issue by the Institute of Chartered Accountants of Indiaand form an integral part of this report.
Pursuant to section 129(3) of the Act and the relevant rules made thereunder astatement containing salient features of the financial statement of the subsidiary companyis given in form AOC 1 and forms an integral part of this report.
10 Corporate Governance
In terms of Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 provisions of corporate governance contained in Regulations 17 to 2646(2)(b)(i) and paras C D and E of Schedule V to the above SEBI regulations are notapplicable to the Company.
11 Listing of shares in BSE
During the financial year under report the equity shares continued to be listed atBSE Which has nationwide trading terminals.
12 Extract of Annual Return
The extract of annual return in form MGT 9 as required under section 92 of the Act asat 31st March 2019 is annexed to this report as Annexure A which forms part of thisreport.
13 Key Managerial Personnel
The key managerial personnel of the Company are given below:
|Sr No. ||Name ||Designation |
|1 ||Shri Manish Murli Dialani ||Managing Director |
|2 ||Smt Lajwanti M Dialani ||Whole Time Director |
|3 ||Shri Mahaveer Prasad Jain ||Chief Financial Officer |
|4 ||Smt Prakriti Sethi ||Company Secretary |
14 Board of Directors
During the F.Y 2018-19 the following changes took place in composition of board ofdirectors:
As recommended by the Nomination and Remuneration Committee and as required under theprovisions of the Companies Act 2013 the Board has appointed Mr. Laxmikant RamswaroopPatodia (DIN: 03497821) and Vishesh Mahesh Nihalani (DIN: 06786707) as additionalindependent Director for a period of five years with effect from 20th June 2018 andfurther their appointment were approved by members in AGM dated 24/09/2018.
Pursuant to the provisions of Section 149 of the Act the independent directors havesubmitted declarations that each of them meet the criteria of independence as provided inSection 149(6) of the Act along with Rules framed thereunder and Regulation 16(1 )(b) ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("SEBI Listing Regulations"). There has been nochange in the circumstances affecting their status as independent directors of theCompany.
The independent Directors namely Mr. Ashok Patni (DIN:00162153) Mr. KishoreMotiyani (DIN 00161589) and Mr. Murlidhar Menghani (DIN 00157301) resigned from the boarddue to personal commitments and reasons with effect from 20th June 2018.
Mr. Daya Ram Khanchandani ceased as Director of the Company w.e.f 30.01.2019due to his death.
Changes in composition of board of directors after financial ended on 31/03/2019 are asfollows:
As recommended by the Nomination and Remuneration Committee and approved byBoard and as required under the provisions of the Companies Act 2013 Miss Priya MurlidharMakhija (DIN: 07109712) as additional independent Directors. As per the provisions of theCompanies Act 2013 Independent Directors have been appointed for a period of five yearsand shall not be liable to retire by rotation. Her appointments require shareholdersapproval and are included in the notice.
As recommended by the Nomination and Remuneration Committee and approved byBoard and as required under the provisions of the Companies Act 2013 Mr. Murli WadhumalDialani as additional Directors and with effect from April 11 2019 to hold office ofDirector up to the date of ensuing Annual General Meeting. The Company has received anotice in writing from a member as prescribed under section 160 of the Act proposing thecandidature of Mr. Murli Wadhumal Dialani for the office of Director of the Company.Further the Board on recommendation of Nomination and Remuneration Committee has proposedto appoint Mr. Murli Wadhumal Dialani as Whole-time Director for a period of 5 (five)years from this AGM i.e. from 28/09/2019 to 27/09/2024 and to designated as Chairman. Hisappointments require shareholders approval and are included in the notice
The Independent Directors of your Company have given the certificate of independence toyour Company stating that they meet the criteria of independence as mentioned underSection 149(6) of the Companies Act 2013.
15 Number of meetings of the Board
During the year under review the board met 7 times on 30.05.2018 20.06.201806.08.2018 24.08.2018 12.11.2018 15.12.2018 and 08.02.2019. The intervening gap betweenthe meetings was within the period prescribed under the Companies Act 2013 and theListing Regulations.
16 Board Evaluation
The performance evaluation of the independent directors was completed. The performanceevaluation of the Chairman and non-independent directors was carried out by theindependent directors and was accepted by the Board. The Board of directors expressedsatisfaction of the evaluation process adopted by the Company.
17 Particulars of loans guarantees or investments by the Company
During the year the Company has not given any loan or issued any guarantee providedany security or made any investment/subscription purchase or otherwise the securities ofany other body corporate.
18 Whistle Blower policy/Vigil Mechanism
The Company has a Whistle Blower Policy and has established the necessary vigilmechanism for directors and employees to report concerns about unethical behavior. Noperson has been denied access to the Chairman of the Audit Committee. The said policy hasbeen uploaded on the website of the Company.
19 Policy on director's appointment/remuneration /determining qualifications /positiveattributes etc
Company has constituted Nomination and Remuneration Committee and adopted Nominationand Remuneration Policy formulated in compliance with Section 178 of the Companies Act2013 read with rules thereunder and of the SEBI (LODR) Regulations 2015. The said policyincludes criteria for determining qualifications positive attributes independence ofdirectors and other matters provided. During the reporting period the board had threemembers consisting of non-executive and independent directors.
The said policy is of the company on director's appointment and remuneration includingthe criteria for determining qualification positive attribute independence of adirectors and other matters as required under sub section (3) of section 178 of thecompanies act 2013 is available on our website at : http ://www. m kex im.com/policy/nomination- remunaration-policy.
20 Related party transactions
All transactions entered with related parties for the financial year ended 31st March2019 were on arm's length basis and in the ordinary course of business under third provisoto section 188(1) of the Act. Hence Details are not given in form AOC 2 as required undersection 134(3) (h) of the Act.
Pursuant to section 188 of the Companies Act 2013 member's approval by way of ordinaryresolution has been obtained for the transactions with M/s. Laaj International M/s Kolbafarm Fab Private Limited and M/s Manish Overseas in which some directors are interested.
Omnibus approval wherever required was given for transactions of repetitive nature onhalf yearly basis. All related party transactions are placed before the Audit Committeeand the Board of Directors for approval. All related party transactions entered during thefinancial year ended 31st March 2019 are disclosed in the notes to accounts.
21 Significant and material orders passed by the regulators or courts
There are no significant and material orders passed by the regulators or courts againstthe Company during the year. There are also no material development which may impact onthe business of the Company from the end of the financial year and the date of thisreport.
22 Directors responsibility statement
To the best of knowledge and belief and according to the information and explanationobtained by them your directors make the following statement in terms of section 134(3)(c) of the Companies Act 2013:
(a) That in preparation of the annual accounts for the year ended 31st March2019 the applicable accounting standards have been followed and that there were nomaterial departures;
(b) 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 31st March 2019 and ofthe profit of the Company for the year ended on that date;
(c) 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;
(d) That the annual accounts have been prepared on a going concern basis
(e) that proper internal financial controls were laid down and that such internalfinancial controls were adequate and were operating effectively; and
(f) That the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
23 Statutory auditors
The statutory auditors of the Company M/s Vimal Agrawal & Associates CharteredAccountants (FRN: 004187C) were re-appointed as auditors of the Company in the AGM heldon 29.09.2014 for the period of 5 years i.e. till the AGM held in the year 2019. The saidfirm of Auditor have completed their term of 10 years pursuant to the provisions ofsection 139 of the Companies Act 2013 read with The Companies (Audit and Auditors) Rules2014 and therefore not eligible for re-appointment for five years from the completion ofsuch term:
Accordingly on recommendation of Audit committee and further approval of Board it isproposed to appoint M/s Rishabh Agrawal and Associates Chartered Accountants Jaipur(FRN: 018142C) as statutory auditor of the Company for a period of five years and to holdoffice from the conclusion of this AGM till the conclusion of the 32nd AGM tobe held in the year 2024. The company has obtained consent and eligibility certificatefrom M/s Rishabh Agrawal and Associates Chartered Accountants Jaipur (FRN: 018142C)confirming their willing and eligibility to be appointed as statutory auditor of thecompany if approved by members.
24 Qualification in the auditor's report
With reference to the Statutory auditor's remarks in regard to Ind AS 19 for EmployeesBenefits for provision of gratuity the Directors clarify that the liability for gratuitypayable by the Company is being worked out in consultation with LIC and appropriate policyas advised by LIC will be taken in due course during the current financial year.
25 Cost Audit
The company is not required to maintain cost record as specified by the CentralGovernment under section 148(1) of the Companies Act 2013. The provisions of theCompanies (Cost Records and Audit) Rules 2014 are not applicable to the companyoperations.
26 Secretarial Audit Report
As required under section 204 of the Companies Act 2013 the Secretarial Audit Reportfrom Ms. Anshu Parikh Practising Company Secretary (FCS:9785 CP: 10686) is annexed tothis report as Annexure B which forms part of this report.
With reference to the observations of the Secretarial Auditor in her report we clarifythat delay in disclosure/intimation under mentioned regulations of LODR wereunintentionally due to unavoidable circumstances/for the reasons beyond control. TheCompany has complied with said regulations. The delays of compliances are ofadministrative in nature and the interests of investors are not prejudicially affected.
27 Internal control systems and their adequacy
The Company's internal controls are commensurate with its size and the nature of itsoperations. These have been designed to provide reasonable assurance with regard torecording and providing reliable financial and operational information complying withapplicable statutes safeguarding assets from unauthorized use executing transactionswith proper authorization and ensuring compliance with corporate policies. The company hasa well-defined delegation of power with authority limits for approving contracts as wellas expenditure. Processes for formulating and reviewing annual and long term businessplans have been laid down.
M/s Vimal Agrawal & Associates the statutory auditors of the company have auditedthe financial statements included in this annual report and have issued an attestationreport on our internal control over financial reporting (as defined in section 143 ofCompanies Act 2013).
The internal audit is entrusted to M/s Madhur & Associates Chartered Accountants.The Audit Committee reviews the adequacy and effectiveness of the internal control systemsand suggests improvements wherever required.
28 Environments and Safety
The Company's operations do not pose any environment hazards and are conducted in sucha manner that safety of all concerned and compliances with environmental regulations areensured.
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
30 Statutory Information
A. Conservation of energy:
I. The Company has committed to conserve energy improve energy efficiency throughreduction of wastage and optimum utilisation.
ii. Steps taken for utilizing alternate sources of energy: Nil
iii. Capital investment on energy conservation: Nil
B. Technology Absorption:
The Company has no technology agreement and the issue of technology absorption does notarise.
C. Foreign exchange earnings and outgo
|Foreign Exchange earnings: ||Rs. 2359.65 lakhs |
|Foreign Exchange outgo: ||Rs. 0.61 lakhs |
31 Details of disclosure pursuant to section 197(12) of the Companies Act 2013 readwith rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are given in Annexure-C which forms part of this report.
32 Material changes and commitments occurred in terms of section 134(3)(l) of thecompanies act 2013
No significant changes and commitment occurred between the date of the balance sheetand the date of the report.
33 Disclosures under Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013
Pursuant to the disclosure requirements under section 134(3) and rules thereof of theCompanies Act 2013 the Company has constituted internal complaint committee as requiredunder provisions of Sexual Harassment of woman at workplace (prevention Prohibition &Redressal) Act 2013.
The Company has not received any complaint of sexual harassment during the year underreview.
34 Risk Management policy
The Company has developed and established a risk management policy/ Plan for theCompany which sets out a framework for identification of elements of Risk if any which inthe opinion of the Board may threaten the existence of the Company and has devised aproper system of risk management and internal compliance and control through its BoardAudit Committee KMP's and other Senior personnel of the Company.
35 Audit Committee
The Audit committee has been constituted to meet the requirements of the provisions ofthe Companies Act 2013 rules and regulations as may be prescribed. The members of theAudit Committee have requisite financial and management expertise.
Composition of the Committee during F.Y 2018-19 as follows:-
|S.No ||Name of Members ||Designation |
|1 ||Mr. Dayaram Khanchandani ||Chairman (past director passed away on 30/01/2019) |
|2 ||Mr. Laxmikant R Patodia ||Member |
|3 ||Mr. Vishesh M Nihalani ||Member |
|4 ||Mrs. Lajwanti m Dialani ||Member |
During the year under report the committee met 6 times on 30.05.2018 06.08.201824.08.2018 12.11.2018 15.12.2018 and 08.02.2019. The recommendations made by the Auditcommittee during the year were accepted by the Board.
36 Nomination and remuneration committee and stakeholders committee
The company has complied with section of regulation 178 regarding constitution ofNomination and remuneration committee and stakeholders committee.
37 Independent Directors' Declaration
The Company has received the necessary declaration from each Independent Director inaccordance with Section 149(7) of the Companies Act 2013 read with Regulations of theListing Regulations that he/she meets the criteria of independence as laid out in Section149(6) of the Companies Act 2013 and Regulations of the Listing Regulations.
38 Change in nature of Business
There is no change in business/objects of the Company during the reporting period.
After the end of F.Y 2018-19 the Company has altered the object clause of itsMemorandum ofAssociation by adding thereto the business activities related tomanufacturing importing exporting distributing buying selling dealing in all mannerin all kinds of cosmetics personal and health care products food and food supplementsetc more particularly define in altered Memorandum of Association of the Company.
The Directors wish to place on record their appreciation of the contribution made bythe employees at all levels.
The Directors also to wish to thank the Company's customers and banks for theircontinued support and faith reposed in the Company.
By order of the Board
|SD/- ||SD/- |
|Manish Murlidhar Dialani ||Lajwanti M Dialani |
|Managing Director ||Whole Time Director |
|DIN: 05201121 ||DIN:05201148 |
|Place : Jaipur || |
|Date: 24.08.2019 || |